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Splunk (SPLK) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Splunk (SPLK) closed at $100.32, marking a -1.89% move from the previous day. This change lagged the S&P 500's 1.54% loss on the day. Meanwhile, the Dow lost 1.49%, and the Nasdaq, a tech-heavy index, lost 2.17%.

Heading into today, shares of the maker of software that helps companies collect and analyze internal data had gained 16.36% over the past month, outpacing the Computer and Technology sector's loss of 4.64% and the S&P 500's loss of 6.77% in that time.

Investors will be hoping for strength from SPLK as it approaches its next earnings release, which is expected to be March 7, 2019. In that report, analysts expect SPLK to post earnings of $0.76 per share. This would mark year-over-year growth of 105.41%. Meanwhile, our latest consensus estimate is calling for revenue of $560.66 million, up 33.58% from the prior-year quarter.

SPLK's full-year Zacks Consensus Estimates are calling for earnings of $1.17 per share and revenue of $1.74 billion. These results would represent year-over-year changes of +88.71% and +36.7%, respectively.

Investors should also note any recent changes to analyst estimates for SPLK. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 6.96% higher within the past month. SPLK is currently a Zacks Rank #2 (Buy).

Looking at its valuation, SPLK is holding a Forward P/E ratio of 87.22. Its industry sports an average Forward P/E of 50.95, so we one might conclude that SPLK is trading at a premium comparatively.

Investors should also note that SPLK has a PEG ratio of 3.07 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.7 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 25, putting it in the top 10% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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