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Will Healthy Revenue Growth Buoy Splunk's (SPLK) Q1 Earnings?

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Splunk Inc. is scheduled to report first-quarter fiscal 2023 (ended Apr 30, 2022) results on May 25, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 447.4%. It pulled off a trailing four-quarter earnings surprise of 115.3%, on average.

The San Francisco, CA-based company is expected to have recorded year-over-year higher revenues, driven by solid demand for cloud-based solutions and customer additions.

Factors at Play

During the quarter, Papa John’s International, Inc. inked a contract with Splunk to leverage data from Splunk Cloud Platform to improve the visibility and performance across more than 3,000 North American stores. The real-time insights are likely to help the restaurant operator cope with the increased demand schedule by aligning its operations accordingly, thereby making critical business decisions to fulfill millions of pizza orders each week. It will also enable it to secure transaction processing and empower vital field operations for smooth functioning. The contract is likely to have generated incremental revenues for Splunk in the quarter.

Splunk is playing a critical role in customers’ digital transformation. It is likely to have benefited from the growing adoption of its data platform and security solutions by organizations owing to the rise in perceived cybersecurity threats. 

For the to-be-reported quarter, management expects total revenues to be between $615 million and $635 million. The Zacks Consensus Estimate for revenues is pegged at $626 million, which indicates growth from the year-ago quarter’s reported figure of $502 million. The consensus estimate for adjusted loss per share is pegged at 72 cents.

Earnings Whispers

Our proven model does not predict an earnings beat for Splunk for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at a loss of 72 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Splunk Inc. Price and EPS Surprise

Splunk Inc. Price and EPS Surprise

Splunk Inc. price-eps-surprise | Splunk Inc. Quote

Zacks Rank: Splunk has a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Ciena Corporation (CIEN - Free Report) is set to release quarterly numbers on Jun 2. It has an Earnings ESP of +6.91% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for NetApp, Inc. (NTAP - Free Report) is +2.70% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Jun 1.

The Earnings ESP for NVIDIA Corporation (NVDA - Free Report) is +2.57% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 25.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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