Splunk (SPLK) PT Raised to 'Street High' $250 at Wells Fargo, 'Growth Undervalued'

(Updated - June 22, 2020 8:31 AM EDT)

(updating comment)

Wells Fargo analyst Philip Winslow raised the price target on Splunk (NASDAQ: SPLK) to a 'Street High' $250.00 (from $205.00) while maintaining an Overweight rating.

The analyst comments "With our positive outlook on the sustainability of growth of the core Splunk Enterprise index and the shift to Splunk Cloud, combined with its natural expansion into data streaming and unbounded learnings as well as federated search, we reiterate our Overweight rating on Splunk and raise our price target from $205 to $250, which is based on a NTM EV/RR multiple of 17.9x. Splunk currently trades at LTM and NTM EV/RR multiples of 20.4x and 13.2x, respectively. Considering that +99% of Splunk’s software revenue should be renewable and we believe Splunk can grow recurring revenue ~35-45% over the medium-term, we view these multiples as compelling when compared with other software stocks with recurring revenue (RR) models, which are expected to grow 18.1% over the next twenty-four months and trade at an average LTM EV/RR multiple of 16.6x."

You May Also Be Interested In

• QuantumScape (QS) PT Lowered to $6 at Truist Securities
• Intuitive Surgical (ISRG) PT Raised to $435 at Piper Sandler
• Rubrik IPO: 5 key things to know