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

Zacks Equity Research
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Splunk (SPLK) closed at $137.70 in the latest trading session, marking a +1.43% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.31%, and the Nasdaq, a tech-heavy index, added 0.34%.

Prior to today's trading, shares of the maker of software that helps companies collect and analyze internal data had gained 11.43% over the past month. This has outpaced the Computer and Technology sector's gain of 6.46% and the S&P 500's gain of 4.67% in that time.

Investors will be hoping for strength from SPLK as it approaches its next earnings release. In that report, analysts expect SPLK to post earnings of -$0.15 per share. This would mark a year-over-year decline of 114.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $395.73 million, up 26.98% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.68 per share and revenue of $2.21 billion, which would represent changes of +26.32% and +22.51%, respectively, from the prior year.

Any recent changes to analyst estimates for SPLK should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.25% lower. SPLK is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note SPLK's current valuation metrics, including its Forward P/E ratio of 81.04. This valuation marks a premium compared to its industry's average Forward P/E of 53.5.

We can also see that SPLK currently has a PEG ratio of 3.4. 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 3.26 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 26, putting it in the top 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SPLK in the coming trading sessions, be sure to utilize Zacks.com.

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