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Splunk (SPLK) Gains But Lags Market: What You Should Know

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Splunk (SPLK - Free Report) closed the most recent trading day at $123.40, moving +0.02% from the previous trading session. This move lagged the S&P 500's daily gain of 0.07%. Meanwhile, the Dow 0%, and the Nasdaq, a tech-heavy index, lost 0.29%.

Heading into today, shares of the maker of software that helps companies collect and analyze internal data had gained 4.9% over the past month, lagging the Computer and Technology sector's gain of 5.79% and outpacing the S&P 500's gain of 4.3% in that time.

Wall Street will be looking for positivity from SPLK as it approaches its next earnings report date. This is expected to be November 21, 2019. In that report, analysts expect SPLK to post earnings of $0.52 per share. This would mark year-over-year growth of 36.84%. Meanwhile, our latest consensus estimate is calling for revenue of $603.71 million, up 25.52% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.85 per share and revenue of $2.31 billion. These totals would mark changes of +39.1% and +28.14%, respectively, from last year.

Any recent changes to analyst estimates for SPLK should also be noted by investors. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 6.02% lower within the past month. SPLK currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that SPLK has a Forward P/E ratio of 66.69 right now. This valuation marks a premium compared to its industry's average Forward P/E of 58.91.

Also, we should mention that SPLK has a PEG ratio of 2.13. 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 2.85 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 79, putting it in the top 31% 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.

To follow SPLK in the coming trading sessions, be sure to utilize Zacks.com.


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