Here’s how investors should make decisions about buying, holding or selling Splunk Inc. (NASDAQ:SPLK) stock. On Thursday, shares of Splunk Inc. (NASDAQ:SPLK) closed higher after an active session. The shares accumulated 2.17 points or 1.75 percent at $126.42 with a heavy trade volume of 2.029 million shares. After opening the session at $125.4, the shares went as high as $128.38 and as low as $124.43, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $18.8 billion and now has 148.87 million shares outstanding. Splunk Inc. (SPLK) stock has lost -5.85 percent of market value in 21 trading days.
SPLK stock has a trailing 3-year beta of 2.07, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$1.91 a share in the trailing twelve months. The stock’s value has surged 20.57 percent year to date (YTD) against a rise of 18.78 percent in 12 month’s time. The company’s shares still trade -12.03 percent away from its 1-year high of $143.70 and 51.06 percent up from 52-week low of $83.69. The average consensus rating on the company is 1.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.
Splunk Inc. (SPLK) will probably climb 19.87 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $200-month high price target. This represents a whopping 58.2 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $157, which represents a return potential of 24.19 percent when compared to the closing price of the stock of $126.42 on Thursday, March 14. The lowest price target for the stock is $112 — slightly more than -11.41 percent from SPLK’s current share price.
History has shown that shares in Splunk Inc. have gone up on 16 different earnings reaction days and are predicted to add 0.08 percent when the company reports upcoming earnings. Investors will get their next glimpse of SPLK’s Q1 earnings on May 30. Analysts are forecasting revenue to climb 26.8 percent to $395M in the fiscal first quarter, while earnings are seen soaring by nearly 100 percent to -$0.14 per share. It earned $0.93 per share, better than the $0.76, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $622M, better than the $563M analysts expected. Earnings are estimated to increase by 48.7 percent this year, 32.76 percent next year and continue to increase by 33 percent annually for the next 5 years.
The stock is currently hovering around the first support level of $124.44. Below this, the next support is placed in the zone of $122.46. Till the time, the SPLK stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 48.57 on daily chart, which may remain a cause for concern. If the price breaks below $122.46 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $128.39 mark may result into a pull-back move towards $130.36 level.
Further, it is sporting a 10.44 on the Price-to-Sales ratio. Compare this with the industry average P/S of 5.45. 80.9 percent is the gross profit margin for Splunk Inc. and operating margin sits at -12.2 percent. Along with this, the net profit margin is -12.1 percent.