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Can Healthy Revenue Growth Aid Splunk's (SPLK) Q4 Earnings?

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Splunk Inc. is scheduled to report fourth-quarter fiscal 2023 results on Mar 1, after the market closes. In the last reported quarter, the company delivered an earnings surprise of 260.9%. It pulled off a trailing four-quarter earnings surprise of 222%, on average. The San Francisco, CA-based software solutions company is expected to have recorded year-over-year higher revenues backed by positive demand trends.

Factors at Play

During the fourth quarter, the company announced a five-year extension of its Strategic Collaboration Agreement (SCA) with Amazon Web Services, Inc. (AWS). The long-term strategic collaboration agreement is dedicated to helping businesses and clients by addressing their business data concerns and enabling them to innovate and upgrade their current environments with no constraints.

The company unveiled a preview of Splunk Add-on for Amazon Security Lake, which enables data storage in Open Cybersecurity Schema Framework (OCSF) and streamlines the process for customers by requiring them to manage only one feed for security data analysis instead of managing multiple services. Splunk Add-on makes it easier for users to easily integrate the OCSF-compliant data in Amazon Security Lake to address various security cases such as threat detection, investigation and incident response. This will provide cost-effective security solutions to customers and its data-driven insights enable security teams to operate with enhanced efficiency. These developments are likely to have had a positive impact on the company’s fourth-quarter earnings.

For the January quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,072 million, which indicates growth from $901 million reported in the year-ago quarter. Adjusted earnings per share are pegged at $1.11, suggesting an expansion from 66 cents recorded in the year-earlier quarter.

Earnings Whispers

Our proven model predicts an earnings beat for SPLK this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is exactly the case here.

Earnings ESP: Splunk’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +0.39%, with both pegged at $1.11. 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: It currently carries a Zacks Rank #2.

Other Stocks to Consider

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

International Game Technology (IGT - Free Report) is set to release quarterly numbers on Feb 28. It has an Earnings ESP of +20.00% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Broadcom (AVGO - Free Report) is +0.67% and carries a Zacks Rank of 3. The company is set to report quarterly numbers on Mar 2.

The Earnings ESP for Monroe Capital Corporation (MRCC - Free Report) is +5.00% and it carries a Zacks Rank of 2. The company is set to report quarterly numbers on Mar 1.

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


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