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Splunk (SPLK) Stock Sinks As Market Gains: What You Should Know

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Splunk (SPLK - Free Report) closed at $110.07 in the latest trading session, marking a -1.49% move from the prior day. This change lagged the S&P 500's daily gain of 1.09%. Elsewhere, the Dow gained 1.13%, while the tech-heavy Nasdaq added 1.51%.

Coming into today, shares of the maker of software that helps companies collect and analyze internal data had gained 8.45% in the past month. In that same time, the Computer and Technology sector lost 0.28%, while the S&P 500 gained 1.92%.

Investors will be hoping for strength from SPLK as it approaches its next earnings release, which is expected to be March 7, 2019. On that day, SPLK is projected to report earnings of $0.74 per share, which would represent year-over-year growth of 100%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $559.75 million, up 33.36% from the year-ago period.

SPLK's full-year Zacks Consensus Estimates are calling for earnings of $1.09 per share and revenue of $1.69 billion. These results would represent year-over-year changes of +75.81% and +32.66%, respectively.

Investors might also notice recent changes to analyst estimates for SPLK. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SPLK is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note SPLK's current valuation metrics, including its Forward P/E ratio of 102.06. Its industry sports an average Forward P/E of 55.9, so we one might conclude that SPLK is trading at a premium comparatively.

It is also worth noting that SPLK currently has a PEG ratio of 3.7. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 3.1 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 25, putting it in the top 10% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.




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