In the latest market close, Splunk (SPLK Quick QuoteSPLK – Free Report) reached $147.16, with a -0.03% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.65%. On the other hand, the Dow registered a gain of 0.38%, and the technology-centric Nasdaq increased by 0.48%.
Heading into today, shares of the maker of software that helps companies collect and analyze internal data had gained 0.68% over the past month, outpacing the Computer and Technology sector’s loss of 2.93% and the S&P 500’s loss of 2.79% in that time.
Investors will be eagerly watching for the performance of Splunk in its upcoming earnings disclosure. On that day, Splunk is projected to report earnings of $1.12 per share, which would represent year-over-year growth of 34.94%. Meanwhile, the latest consensus estimate predicts the revenue to be $1.03 billion, indicating a 10.61% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.78 per share and a revenue of $3.94 billion, indicating changes of +40.52% and +7.86%, respectively, from the former year.
Any recent changes to analyst estimates for Splunk should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there’s been no change in the Zacks Consensus EPS estimate. Splunk is currently a Zacks Rank #2 (Buy).
In terms of valuation, Splunk is presently being traded at a Forward P/E ratio of 38.98. This expresses a premium compared to the average Forward P/E of 34.88 of its industry.
We can also see that SPLK currently has a PEG ratio of 1.32. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. The Internet – Software industry had an average PEG ratio of 1.5 as trading concluded yesterday.
The Internet – Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 59, placing it within the top 24% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.