Summit Redstone Starts Splunk (SPLK) at Buy
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Summit Redstone initiates coverage on Splunk (NASDAQ: SPLK) with a Buy rating and a price target of $72.00, saying it remains the IT infrastructure stock to own and would make a compelling acquisition candidate.
Analyst Srini Nandury commented, "We are relaunching coverage of Splunk (SPLK), a software company that collects, indexes and analyses machine data, with a BUY rating and a $72 PT (20% upside from the current levels). Splunk’s platform is used to derive new insights that are used by users to improve service levels, lower operational costs and address security risks in real time. Splunk’s highly flexible platform allows it to continually develop new use cases such as real-time security and IOT, leading to an ever expanding TAM (up from ~$30bln in 2013 to $50.0bln in 2017) and providing the company with large headroom to grow for many years to come. We expect SPLK to continue and invest in R&D to become an unstructured data platform similar to Oracle/MS-SQL Server platforms for structured data around which an ecosystem is built. Competition currently exists from many point products in various applications and use cases, but we do not see any competitor with as comprehensive a platform as Splunks’. In addition, SPLK has the clear lead with its flexible architecture and patented technology that is hard to displace, benefitting the company for years to come. Furthermore, we believe Splunk makes a compelling acquisition candidate for AMZN, MSFT, IBM or even ORCL, given that it can provide years of growth for any potential acquirer."
Shares of Splunk closed at $59.39 yesterday.
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