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

Zacks Equity Research

In the latest trading session, Splunk (SPLK) closed at $137.77, marking a -0.67% move from the previous day. This change lagged the S&P 500's daily gain of 0.69%. Elsewhere, the Dow gained 0.65%, while the tech-heavy Nasdaq added 0.58%.

Prior to today's trading, shares of the maker of software that helps companies collect and analyze internal data had gained 12.83% over the past month. This has outpaced the Computer and Technology sector's gain of 2.27% and the S&P 500's gain of 1.36% 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 $0.12 per share, which would represent year-over-year growth of 50%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $486.70 million, up 25.34% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.80 per share and revenue of $2.26 billion. These totals would mark changes of +35.34% and +25.21%, respectively, from last 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 remained stagnant. SPLK is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, SPLK is currently trading at a Forward P/E ratio of 76.99. This represents a premium compared to its industry's average Forward P/E of 64.69.

Meanwhile, SPLK's PEG ratio is currently 2.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 3.5 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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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