Wedbush Remains Bullish on Splunk (SPLK) Following 2Q16 Earnings Results
Wedbush reiterated an Outperform rating and $83.00 price target on Splunk (NASDAQ: SPLK) following the company's 2Q16 earnings report. 2Q16 revenue of $148M was ahead of consensus of $140M. EPS was $0.03, beating consensus by 1c. Management raised FY16 revenue guidance by $18M.
Analyst Steve Koenig commented, "SPLK beat expectations soundly and sustained its growth rate. Once again, SPLK showed excellent performance consistency: 2Q16 revenue of $148M (+46% Y/Y) was ahead of our estimate $144M and consensus of $140M, similar to the company’s usual beats. License growth of 42% Y/Y accelerated two points from 1Q. Revenue growth was driven by strong deal counts (deals over $100K up 45% Y/Y) and robust execution across the product portfolio, including Splunk Enterprise and Splunk Cloud. Security continued to be a major growth driver, accounting for about 40% of 2Q revenue, and revenue from the Enterprise Security (ES) app grew over 100% Y/Y. We believe the company’s total contract value (TCV) is growing somewhat faster than billings growth (billings were up 43% Y/Y in 2Q). Also encouraging was the company’s FY16 guidance raise of $18M in revenue, bigger than the 1Q raise of $10M - $14M."
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Shares of Splunk closed at $64.24 yesterday.