Wedbush Raises Price Target on Splunk (SPLK) to $70 Ahead of 2Q Report
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Wedbush reiterated an Outperform rating on Splunk (NASDAQ: SPLK), and raised the price target to $70.00 (from $60.00), ahead of the company's 2Q earnings release. SPLK will report earnings on Thursday, August 25th AMC, followed by a conference call at 3:30 pm. Revenue estimates of $210M are $10M above consensus and the high end of guidance. The EPS estimate of $0.04 is a penny above consensus.
Analyst Steve Koenig commented, "SPLK looks poised for another year of solid beats and revenue guidance increases, as supported by our reseller conversations this week. While the magnitude of the potential outperformance looks similar to last year, investors should expect that SPLK’s license revenue will start to decelerate into the 30% range this year (and the 20% range later next year), a result of SPLK’s larger size and the growth of Splunk Cloud, along with growing ratable revenue recognition. We think SPLK shares can continue to outperform if management provides clarity on this transition in a proactive fashion, which we expect it may do as early as the 2Q call next week, and maintains SPLK’s strong cash flow profile."
Shares of Splunk closed at $63.83 yesterday.
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