Canaccord Lifts PT on Splunk (SPLK) to $75; MGD Unit, Security Efforts Will Bolster Growth Prospects
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Canaccord Genuity boosts it price target on Buy-rated Splunk (NASDAQ: SPLK) from $65 up to $75 following Q2 results released Thursday night.
The firm commented today,
We expect SPLK shares to outperform the market over a 6+ month time frame as investors recognize that 1) the core MGD business has plenty of growth left, 2) the security effort will add to growth, and 3) the transition to cloud is a good thing because improves forward visibility. However, Wall Street’s ongoing infatuation with “calculated billings” apparently spooked after-hours traders as this figure decelerated on a sequential basis (but was essentially in line with our unguided guess). Eventually traders will understand the quite limited descriptive value of quarterly calculate billings, especially when deal duration is moving around in a model shift (as is happening at Splunk). We suppose the good news is that if our pre- and post-quarter belief that Splunk’s long-term fundamental outlook is very attractive, last night’s 7% sell-off represents a good buying opportunity.
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