Drexel Hamilton Starts Splunk (SPLK) at Hold; Big Hype on Big Data, But Big Price Too

May 30, 2012 11:19 AM EDT
Get Alerts SPLK Hot Sheet
Price: $56.42 --0%

Rating Summary:
    34 Buy, 11 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Drexel Hamilton initiates coverage on Splunk (NASDAQ: SPLK) with a Hold. PT $34.00.

Analyst, James Gilman, said, "Given the dearth of new issues and ongoing consolidation of the publicly traded software segment, we believe there is an unquenchable appetite for shares of technology companies in fast growing segments, such as big data, as represented by the 109% one-day appreciation for shares of Splunk following its IPO vs. an approximate 1% decline in the NASDAQ market the same day."

"We consider the stock overvalued relative to industry comparables; however, we foresee no near-term catalysts absent an operational hiccup (which we think is unlikely), a secondary (which we think is highly likely in the next 60 to 90 days), or a privately held competitor coming to the market that could garner investor interest...We expect any pullback in share prices to be modest due to the scarcity of new issues and that we think investors may consider it a likely take-out target."

For an analyst ratings summary and ratings history on Splunk click here. For more ratings news on Splunk click here.

Shares of Splunk closed at $36.38 yesterday.

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