We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Top-Line Growth Drive Splunk (SPLK) Q4 Earnings?
Read MoreHide Full Article
Splunk Inc. is scheduled to report fourth-quarter fiscal 2024 results on Feb 27, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 38.4%. It delivered a trailing four-quarter average earnings surprise of 99.3%.
Based in San Francisco, CA, the software solutions company is expected to record higher revenues year over year, backed by healthy customer engagement, large-scale implementation of its cloud solutions, advanced AI capabilities and aggressive acquisition strategies.
Factors at Play
Splunk’s software has a broad range of applications, including security analytics, business analytics and IT operations. The company is benefiting from a growing user base, evident from the consistently high net retention and competitive win rates alongside an increase in orders. The valuable insight into machine and big data is allowing users/enterprises to improve service levels, reduce operational costs, mitigate security risks and maintain compliance. The growth in customer base is likely to have contributed to the top-line expansion.
As more organizations transition to the cloud, Splunk's cloud offerings become increasingly relevant. Splunk’s Enterprise Security (ES) solutions also hold promise. Users leverage ES to centralize security management on a single platform and better handle the big data scale of their security operations. All these factors are likely to have benefited the top-line growth.
Splunk’s integration with various Amazon Web Services (“AWS”), including Amazon CloudWatch, AWS CloudTrail, AWS Config and others, enables organizations to ingest and analyze the data generated by AWS resources. The initiative, which has helped customers accelerate detection, investigation and response to potential threats within their AWS security environment, is likely to benefit the company in the impending quarter.
The company’s continuous efforts to enhance its core platform and premium products with advanced AI capabilities have found its reach among enterprises to derive actionable insights, detect anomalies, and automate various aspects of data analysis while maintaining control of the AI application over its data. Splunk AI reduces the burden of security, IT, and engineering teams from routine manual tasks and streamlines workflows. This has helped in cost reduction and output expansion.
Splunk’s strategic buyout tactics have also contributed to its performance positively. SPLK has been witnessing an increase in the number of renewable term contracts that is likely to have aided the top line.
The Zacks Consensus Estimate for net sales in the Cloud Services segment is pegged at $503.83 million, indicating solid growth from $413.93 million in the year-ago quarter. Contribution from the License vertical is projected to be $586.92 million, down from $670 million reported in the year-ago quarter.
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,255 million, indicating growth from $1,251 million reported in the year-ago quarter. Adjusted income per share is pegged at $1.87, indicating a decrease from $2.04 recorded in the prior- year period.
Earnings Whispers
Our proven model does not predict an earnings beat for Splunk for the fiscal fourth 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% for SPLK at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Splunk currently carries 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 reporting cycle.
CommScope (COMM - Free Report) is scheduled to report quarterly numbers on Feb 29. It has an Earnings ESP of +9.09% and a Zacks Rank of 3 at present.
Heico (HEI - Free Report) is scheduled to report quarterly numbers on Feb 26. It has an Earnings ESP of +1.77% and a Zacks Rank of 2 at present.
VTEX (VTEX - Free Report) is scheduled to report quarterly numbers on Feb 27. It has an Earnings ESP of +500.01% and a Zacks Rank of 2 at present.
Image: Bigstock
Will Top-Line Growth Drive Splunk (SPLK) Q4 Earnings?
Splunk Inc. is scheduled to report fourth-quarter fiscal 2024 results on Feb 27, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 38.4%. It delivered a trailing four-quarter average earnings surprise of 99.3%.
Based in San Francisco, CA, the software solutions company is expected to record higher revenues year over year, backed by healthy customer engagement, large-scale implementation of its cloud solutions, advanced AI capabilities and aggressive acquisition strategies.
Factors at Play
Splunk’s software has a broad range of applications, including security analytics, business analytics and IT operations. The company is benefiting from a growing user base, evident from the consistently high net retention and competitive win rates alongside an increase in orders. The valuable insight into machine and big data is allowing users/enterprises to improve service levels, reduce operational costs, mitigate security risks and maintain compliance. The growth in customer base is likely to have contributed to the top-line expansion.
As more organizations transition to the cloud, Splunk's cloud offerings become increasingly relevant. Splunk’s Enterprise Security (ES) solutions also hold promise. Users leverage ES to centralize security management on a single platform and better handle the big data scale of their security operations. All these factors are likely to have benefited the top-line growth.
Splunk’s integration with various Amazon Web Services (“AWS”), including Amazon CloudWatch, AWS CloudTrail, AWS Config and others, enables organizations to ingest and analyze the data generated by AWS resources. The initiative, which has helped customers accelerate detection, investigation and response to potential threats within their AWS security environment, is likely to benefit the company in the impending quarter.
The company’s continuous efforts to enhance its core platform and premium products with advanced AI capabilities have found its reach among enterprises to derive actionable insights, detect anomalies, and automate various aspects of data analysis while maintaining control of the AI application over its data. Splunk AI reduces the burden of security, IT, and engineering teams from routine manual tasks and streamlines workflows. This has helped in cost reduction and output expansion.
Splunk’s strategic buyout tactics have also contributed to its performance positively. SPLK has been witnessing an increase in the number of renewable term contracts that is likely to have aided the top line.
The Zacks Consensus Estimate for net sales in the Cloud Services segment is pegged at $503.83 million, indicating solid growth from $413.93 million in the year-ago quarter. Contribution from the License vertical is projected to be $586.92 million, down from $670 million reported in the year-ago quarter.
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,255 million, indicating growth from $1,251 million reported in the year-ago quarter. Adjusted income per share is pegged at $1.87, indicating a decrease from $2.04 recorded in the prior- year period.
Earnings Whispers
Our proven model does not predict an earnings beat for Splunk for the fiscal fourth 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% for SPLK at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Splunk Inc. Price and Consensus
Splunk Inc. price-consensus-chart | Splunk Inc. Quote
Zacks Rank: Splunk currently carries 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 reporting cycle.
CommScope (COMM - Free Report) is scheduled to report quarterly numbers on Feb 29. It has an Earnings ESP of +9.09% and a Zacks Rank of 3 at present.
Heico (HEI - Free Report) is scheduled to report quarterly numbers on Feb 26. It has an Earnings ESP of +1.77% and a Zacks Rank of 2 at present.
VTEX (VTEX - Free Report) is scheduled to report quarterly numbers on Feb 27. It has an Earnings ESP of +500.01% and a Zacks Rank of 2 at present.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.