Splunk (SPLK): Small License Beat, Big Billings Deceleration : UBS
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UBS analyst, Brent Thill, reiterated his Buy rating on shares of Splunk (NASDAQ: SPLK) after headline results beat across the board, However, the analyst thinks investors are likely to fixate on two items 1) the smallest license beat in 5 Qs, especially in the context of (disappointingly) inline deferred revenue, and 2) the ~800bps q/q deceleration in calculated billings growth.
Key points in the quarter include:
1) Cloud is now $100M TCV of run rate billings; orders 2x y/y with largest booking Q to date more than double mgmt's plan with 4 of 10 largest deals in the Q Cloud (each 7 figures)
2) public sector traction also up (notably EAAs); encouraging for an F2Q
3) FY17 to mark GM trough
4) Security use case still strong, consistent at 40% of biz.
No change to the price target of $68 based on 6x NTM Sales.
Shares of Splunk closed at $65.10 yesterday.
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