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Splunk (SPLK) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Splunk (SPLK) closed the most recent trading day at $119.58, moving +1.21% from the previous trading session. The stock outpaced the S&P 500's daily gain of 1.09%. At the same time, the Dow added 1.21%, and the tech-heavy Nasdaq gained 1.34%.

Prior to today's trading, shares of the maker of software that helps companies collect and analyze internal data had gained 3.72% over the past month. This has outpaced the Computer and Technology sector's loss of 0.65% and the S&P 500's loss of 1.17% in that time.

Wall Street will be looking for positivity from SPLK as it approaches its next earnings report date. On that day, SPLK is projected to report earnings of $0.52 per share, which would represent year-over-year growth of 36.84%. Meanwhile, our latest consensus estimate is calling for revenue of $603.71 million, up 25.52% from the prior-year quarter.

SPLK's full-year Zacks Consensus Estimates are calling for earnings of $1.86 per share and revenue of $2.31 billion. These results would represent year-over-year changes of +39.85% and +28.14%, respectively.

Any recent changes to analyst estimates for SPLK should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SPLK is currently a Zacks Rank #3 (Hold).

Investors should also note SPLK's current valuation metrics, including its Forward P/E ratio of 63.47. For comparison, its industry has an average Forward P/E of 55.33, which means SPLK is trading at a premium to the group.

We can also see that SPLK currently has a PEG ratio of 2.03. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SPLK's industry had an average PEG ratio of 2.65 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 76, putting it in the top 30% 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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