SPLK $45- $60 >>Shares of software product provider Splunk (SPLK) are surging after the company's second quarter earnings results surpassed expectations and the company increased its FY15 revenue outlook. WHAT'S NEW: Splunk reported Q2 earnings per share of 1c on revenue of $101.5M, which surpassed analysts' expectations of a 2c loss and $93.93M, respectively. Splunk said its license revenues were $62.1M, up 44% year-over-year. During the quarter, the company signed more than 500 new customers. Looking ahead, Splunk expects its Q3 revenue to be in the range of $105M-$107M, which is higher than analysts' $104.31M expectation. The company sees its Q3 non-GAAP operating margin to be approximately 1%.
WHAT'S NOTABLE: The software provider increased its fiscal year 2015 revenue view to $423M-$428M from $402M-$410M, beating analysts' consensus estimates of $411.59M. The company's FY15 non-GAAP operating margin is expected to be approximately 1%, vs. the company's prior 0% guidance.
ANALYST REACTION: Pacific Crest analyst Brenden Barnicle feels that Splunk's momentum is "impressive" since its Q2 earnings beat all expectations and the company increased its FY15 guidance. He said that the firm expects this traction to continue throughout the rest of FY14 due to the seasonality of bigger transactions. He believes that Splunk is likely to encounter sustained growth in the long term. Barnicle kept a $68 price target on Splunk with an Outperform rating. Canaccord analyst Richard Davis lowered his price target to $60 from $70, even though the company had "excellent" Q2 earnings results. He believes that shares are now close to reasonably priced and said that this could signify that the long-talked about multiple compression is nearly finished. If so, Davis feels that shares of the software company should be able to advance at least 15%-20%. He kept Splunk with a Buy rating. PRICE ACTION: During late morning trading, Splunk rose $9.14 or 20.13%, to $54.39. OTHERS TO WATCH: Tableau Software (DATA), a competitor to Splunk in the software product industry, was up about 7.3% to $64.88. :theflyonthewall. |
