Home| Features| About| Customer Support| Request Demo| Our Analysts| Login
Gallery inside!

Stocks Of Splunk Spike On Strong Forecasts

May 25, 2023
minute read

Splunk Inc. witnessed a notable surge of over 7% in after-hours trading on Wednesday, following its impressive forecast that allayed concerns about the technology spending landscape. The software company released its results for the fiscal first quarter, which is typically a slower period for sales of their data-crunching software. However, the focus of Wall Street was primarily on the executives' forecast after they provided disappointing annual guidance in March.

During the announcement, Splunk's executives provided guidance for second-quarter revenue in the range of $880 million to $895 million. Additionally, they adjusted their annual forecast to raise targets for adjusted operating margin and free cash flow. Analysts, on average, had anticipated second-quarter sales of $868 million, according to FactSet data.

For the fiscal first quarter, Splunk reported a loss of $196.4 million, equivalent to $1.19 per share, on sales of $419.4 million, marking an increase from $674 million in the previous year. After adjusting for stock compensation, restructuring costs, and other factors, the company reported earnings of 18 cents per share, a significant improvement from the adjusted loss of 32 cents per share reported a year ago. Analysts, on average, had expected an adjusted loss of 14 cents per share on sales of $723 million.

In a statement, Chief Executive Gary Steele expressed his satisfaction with Splunk's performance, stating, "Splunk delivered another solid quarter and once again delivered durable growth with increasing profitability and free cash flow."

Splunk has undergone substantial changes in recent years, including a change in both its chief executive and chief financial officer amidst a growth slowdown. The company also implemented layoffs earlier this year, affecting more than 300 employees.

Furthermore, Splunk faces uncertainties in the tech spending environment, particularly among its banking customers who have experienced a crisis in 2023 that has had repercussions for their preferred software providers, such as Tenable Holdings Inc.

In anticipation of Splunk's earnings release, JP Morgan analysts cautioned about macroeconomic factors, particularly the potential impact from recent banking turmoil. While they maintained a neutral rating on the stock, they highlighted the financial services sector as one of Splunk's larger verticals, with a potential difference in exposure between bigger banks and smaller regional banks.

Over the past year, Splunk's stock has displayed some volatility but has shown an overall gain. During this period, the company's shares have risen by 9.7%, outperforming the 5.2% gain of the S&P 500 index.

Valentyna Semerenko
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

Subscribe to our newsletter!

As a leading independent research provider, TradeAlgo keeps you connected from anywhere.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Related posts.