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Opinions Mike S. Newton, CIM FCSI
Splunk IncSPLKTOP PICKMar 31, 2014
$71.49
Stock price when the opinion was issued
$156.90
As of Mar 15, 2024. Market Open.
Business Services
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RISKY
BUY
Enterprise cloud computing has had a rough year, but SPLK just reported a strong quarter and rallied. They reported 83 cents EPS vs. the expected 25 and much higher than expected sales, up 44% year over year. They raised their full-year forecast. In October, shares trades in the low-$60s, but their business is holding up just fine.
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DON'T BUY
BUY
Last week, they delivered a nice top and bottom-line beat and raised its full-year forecast. But they didn't raise their annual recurring revenue guidance, and cut it by $250 million and cloud revenue came in light for the quarter. So, shares tumbled 12% the next day. Remember that Splunk is transitioning to a software-as-a-service business model, so maybe there's a speed bump (given the recurring revenue guidance). But demand for security isn't going away.
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PAST TOP PICK
(A Top Pick Sep 21/20, Down 12%) He bought a 1/3 position here at $155, and he'll add at 140 and 125. Growing like a weed despite its scale. Uses are infinite, very focused on visualizing and analyzing machine data. Management always has profitability in mind. Valuation continues to be reasonable. Growth trajectory, but almost considered cheap.
Kim BoltonOwned
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Premium contentTOP PICK
Stockchase Research Editor: Michael O'Reilly SPLK has worked hard to transition their business from an on-premises software service to a cloud-based business and the results are beginning to show. Recently reported earnings beat analyst estimates with annualized recurring revenues surging by over 40% to $2.3 billion. Over 90% of the stock is held by institutions, who have a strong staying power. The company is still not yet profitable, but with the pipeline of projects and cash flow growing (an estimated $900 million last year), they are well positioned. We would purchase this with a stop-loss of $100, looking to achieve $209 -- upside potential exceeding 54%. Yield 0% (Analysts’ price target is $208.91)
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WAIT
It sold off in today's Pfizer vaccine really. Be patient, don't wait. He strongly believes in it. This could reach $180.
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PARTIAL BUY
Allan Tong’s Discover Picks Despite its unfortunate name, Splunk is an American data analytics company worth considering. Clients that use their platform include Intel, Comcast and Coca-Cola. It IPO'd in 2012 as an early big-data tech stock and has risen in this space since. Their data has moved to the cloud, and their cybersecurity segment has grown. Read Uber Stock and Splunk Stock: 3 More Exciting Top Tech Stocks to Watch for our full analysis.
Stockchase DiscoverOwned
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TOP PICK
A leader in data analytics, analyzing a company's data and actionable offering results to managers. They've shifted to a subscription model that investors love. They have competitors, but their focus on machine data is unique. They've shifted business to the cloud and a a result its rate prturn has soared. SPLK has been around for a long time. They target $1 billion in cash flows by 2023. He targets $230. Buy a third now, buy at $150, then at $125. (Analysts’ price target is $238.44)
Kim BoltonOwned
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COMMENT
IPOd in 2012, arguably as the first big-data tech stock. Unfairly sold off this week, along with many other tech names, due to the rush to buy tech IPOs this past week, namely Snowflake. Deserves a look.
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TOP PICK
Big player in big data space. Now their data play is in the cloud. Cybersecurity is now a more mature business. Right trends at the right time. Q4 earnings well above consensus. Lowered guidance in January, which gave investors a chance to buy. His price target is 137. Not expensive. PEG ratio is 2.07. No dividend. (Analysts’ price target is $151.97)
Kim BoltonOwned
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COMMENT
What do you do with a price target? Price target of $130.65. Once he gets within 5% of a target, he looks to sell some (33-50%) shares. and even more if a stock price surpasses that target.
Kim BoltonOwned
Business Services
Big data is not only big, it is massive and is getting syrupy and hard to figure out. This company is the undisputed leader in operational intelligence. Detects software glitches in your network. Cleanses everything and puts it in a usable format. Has corrected quite a bit because high growth names are coming down. Great buy here.