Splunk’s Fiscal Second Quarter Results – A Scare For The Bears, Says UBS

In a report issued today to investors, UBS analyst Brent Thill reiterated a Buy rating on Splunk Inc. (NASDAQ:SPLK) and slightly raised his price target to $56 (from $55), following the company’s fiscal second-quarter 2015 results, posting revenue of $101.5M (+52% YoY) that beat Thill’s estimate by 8%.

Thill noted, “Skeptics were proven wrong as SPLK handily beat bearish consensus expectations into the F2Q15 print, demonstrating accelerating revenue growth, customer growth, potential for meaningful operating leverage and cash flow generation. Most notably, SPLK is clearly addressing the platform’s (high) pricing concerns head-on where we see the strategy of ongoing adjustments to entry-level tiers as the right approach to lower overall customer adoption barriers and drive transaction velocity – 70-80% of the 500+ logos added in the Q were noted as these entry-level customers and SPLK now has 7900+ customers worldwide (+32% YoY, 7% QoQ). With >70% of license bookings coming from existing customers, SPLK has demonstrated it can repeatedly and successfully sell into its installed base; we see consciously growing the aggregate customer footprint as a very strategic approach.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brent Thill has a total average return of 12.6% and a 70.8% success rate. Thill has a -15.9% average return when recommending SPLK, and is ranked #150 out of 3266 analysts.

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