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Splunk (SPLK) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Splunk closed at $104.39, marking a -1.77% move from the previous day. This move lagged the S&P 500's daily loss of 0.79%. At the same time, the Dow lost 1.07%, and the tech-heavy Nasdaq lost 2.71%.

Heading into today, shares of the maker of software that helps companies collect and analyze internal data had gained 8% over the past month, outpacing the Computer and Technology sector's gain of 2.73% and the S&P 500's gain of 4.16% in that time.

Investors will be hoping for strength from Splunk as it approaches its next earnings release. In that report, analysts expect Splunk to post earnings of $0.42 per share. This would mark year-over-year growth of 366.67%. Meanwhile, our latest consensus estimate is calling for revenue of $888.03 million, up 11.18% from the prior-year quarter.

SPLK's full-year Zacks Consensus Estimates are calling for earnings of $3.13 per share and revenue of $3.9 billion. These results would represent year-over-year changes of +16.36% and +6.83%, respectively.

Investors should also note any recent changes to analyst estimates for Splunk. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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 has moved 35.2% higher. Splunk is currently a Zacks Rank #3 (Hold).

Digging into valuation, Splunk currently has a Forward P/E ratio of 33.97. For comparison, its industry has an average Forward P/E of 41.37, which means Splunk is trading at a discount to the group.

Also, we should mention that SPLK has a PEG ratio of 1.37. 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 was holding an average PEG ratio of 1.71 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 73, putting it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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 to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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