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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 $113.20 in the latest trading session, marking a -0.34% move from the prior day. This change lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.4%.

Heading into today, shares of the maker of software that helps companies collect and analyze internal data had lost 2.86% over the past month, lagging the Computer and Technology sector's gain of 0.51% and the S&P 500's loss of 0.14% in that time.

SPLK will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.52, up 36.84% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $603.71 million, up 25.52% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.86 per share and revenue of $2.31 billion. These totals would mark changes of +39.85% and +28.14%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for SPLK. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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).

Digging into valuation, SPLK currently has a Forward P/E ratio of 61.02. This represents a premium compared to its industry's average Forward P/E of 55.56.

We can also see that SPLK currently has a PEG ratio of 1.95. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 2.66 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 76, putting it in the top 30% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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