In the latest trading session, Splunk (SPLK - Free Report) closed at $162.67, marking a -0.74% move from the previous day. This move lagged the S&P 500's daily gain of 0.33%. Elsewhere, the Dow gained 0.3%, while the tech-heavy Nasdaq added 0.67%.
Prior to today's trading, shares of the maker of software that helps companies collect and analyze internal data had gained 5.21% over the past month. This has lagged the Computer and Technology sector's gain of 5.51% and outpaced the S&P 500's gain of 3.24% in that time.
Investors will be hoping for strength from SPLK as it approaches its next earnings release, which is expected to be March 4, 2020. On that day, SPLK is projected to report earnings of $0.96 per share, which would represent year-over-year growth of 3.23%. Our most recent consensus estimate is calling for quarterly revenue of $783.94 million, up 26.02% from the year-ago period.
Investors might also notice recent changes to analyst estimates for SPLK. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 a Zacks Rank #2 (Buy).
Looking at its valuation, SPLK is holding a Forward P/E ratio of 70.54. For comparison, its industry has an average Forward P/E of 51.59, which means SPLK is trading at a premium to the group.
We can also see that SPLK currently has a PEG ratio of 2.26. 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 was holding an average PEG ratio of 2.53 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 109, putting it in the top 43% 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.