How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Splunk (
SPLK Quick Quote SPLK - Free Report) ten years ago? It may not have been easy to hold on to SPLK for all that time, but if you did, how much would your investment be worth today? Splunk's Business In-Depth
With that in mind, let's take a look at Splunk's main business drivers.
San Francisco, CA-based Splunk Inc. provides software solutions that enable enterprises to gain real-time operational intelligence by harnessing the value of their data. The company’s offerings enable users to investigate, monitor, analyze and act on machine data and big data, irrespective of format or source, and helps in operational decision making.
The company’s flagship offering, Splunk Enterprise, is primarily a machine data platform. It can collect and index petabytes of machine data on a daily basis. Splunk Enterprise also enables users to interactively explore, analyze and visualize data stored in sources such as Hadoop and Amazon S3. Splunk Cloud delivers the benefits of Splunk Enterprise deployed and managed reliably and scalably as a service. Splunk Light provides log search and analysis, which are designed, priced and packaged for small IT environments. The company’s premium solutions include Splunk Enterprise Security (ES), Splunk IT Service Intelligence (ITSI) and Splunk User Behavior Analytics (UBA). These solutions address emerging security threats and information and event management (SIEM), monitor health and key performance indicators of critical IT, and detect cyber-attacks and insider threats in business operations, respectively. Splunk complements the aforementioned services with few add-ons, including Splunk Machine Learning Toolkit (MLTK), Splunk App for AWS, Splunk DB Connect and Cisco Firepower App for Splunk. Splunk generated revenues of $2.67 billion in fiscal 2022. License and Cloud Services contributed 39.5% and 35.3% of total revenues in the fiscal, respectively. Maintenance and services revenues accounted for the rest. Splunk Enterprise customers pay license fees generally based on their estimated peak daily indexing capacity needs. The company also generates revenues from enterprise adoption agreements (EAAs). Splunk Cloud customers pay an annual subscription fee based on the combination of the volume of data indexed per day and the amount of data stored. The company faces significant competition from the likes of Oracle, IBM, Intel and Microsoft, among others. Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Splunk ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in June 2012 would be worth $3,308.65, or a 230.87% gain, as of June 9, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 210.47% and the price of gold went up 11.67% over the same time frame.
Analysts are anticipating more upside for SPLK.
Splunk reported relatively healthy first-quarter fiscal 2023 results with year-over-year improvement in the bottom line and top line. It is likely to benefit from solid demand for cloud-based solutions and customer additions. The company’s software offerings enable users to have deep insight into their data in real-time. Splunk’s software can be deployed in a wide variety of computing environments, from a single laptop to large globally distributed data centers and hybrid cloud environments. However, the transition to a renewable model from a perpetual license model is hurting its cash-flow generation ability due to lower upfront payment. Management expects sluggish on-premise business to hurt growth in the near term. Slowing maintenance and services and license revenues amid intensifying competition remain headwinds.
Over the past four weeks, shares have rallied 20.41%, and there have been 13 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.