Splunk (SPLK) closed at $106.29 in the latest trading session, marking a -1.95% move from the prior day. This move lagged the S&P 500’s daily loss of 0.04%. Meanwhile, the Dow lost 0.22%, and the Nasdaq, a tech-heavy index, added 0.16%.
Heading into today, shares of the maker of software that helps companies collect and analyze internal data had gained 12.49% over the past month, outpacing the Computer and Technology sector’s loss of 4.01% and the S&P 500’s loss of 4.99% in that time.
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 $0.76 per share, which would represent year-over-year growth of 105.41%. Our most recent consensus estimate is calling for quarterly revenue of $560.66 million, up 33.58% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.17 per share and revenue of $1.74 billion. These totals would mark changes of +88.71% and +36.7%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for SPLK. 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate has moved 6.96% higher. SPLK is currently a Zacks Rank #2 (Buy).
Valuation is also important, so investors should note that SPLK has a Forward P/E ratio of 92.46 right now. For comparison, its industry has an average Forward P/E of 56.49, which means SPLK is trading at a premium to the group.
Also, we should mention that SPLK has a PEG ratio of 3.25. 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 2.95 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 26, 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Splunk Inc. (SPLK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research