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

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Splunk (SPLK) closed at $169.84 in the latest trading session, marking a +1.04% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.65%. At the same time, the Dow added 0.94%, and the tech-heavy Nasdaq gained 0.9%.

Heading into today, shares of the maker of software that helps companies collect and analyze internal data had gained 7.04% over the past month, outpacing the Computer and Technology sector's gain of 4.75% and the S&P 500's gain of 2.97% 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 March 4, 2020. The company is expected to report EPS of $0.96, up 3.23% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $783.94 million, up 26.02% from the prior-year quarter.

Investors should also note any 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.

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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. SPLK is currently a Zacks Rank #2 (Buy).

In terms of valuation, SPLK is currently trading at a Forward P/E ratio of 72.36. This represents a premium compared to its industry's average Forward P/E of 49.76.

We can also see that SPLK currently has a PEG ratio of 2.32. 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 industry currently had an average PEG ratio of 2.54 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 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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