Splunk’s Revenue Forecast Misses Estimates. The Stock Is Gaining.

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Splunk website on smartphone.

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Tiffany Hagler-Gierd/Businesshala

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Splunk shares were up on Thursday after the software company released its latest fourth-quarter and fiscal year revenue forecasts that fell short of analysts’ estimates.

Splunk (ticker: SPLK) was up 2.5% to $114.50 on Thursday. On Wednesday, the stock closed down more than 7% at $111.70.

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The company said it expects fourth-quarter revenue of $740 million to $790 million and fiscal year revenue between $2.51 billion and $2.56 billion.

Analysts surveyed by FactSet predicted fourth-quarter revenue of $828.3 million for Splunk and fiscal 2022 revenue of $2.58 billion for Splunk.

Splunk reported a third-quarter adjusted loss of 37 cents per share late Wednesday, well short of Wall Street’s forecast for a loss of 52 cents per share. Third quarter revenue was $664.8 million versus Wall Street’s forecast of $646.5 million.

Annual recurring revenue for Splunk’s cloud operations was $1.11 billion, up 75% from a year ago. Total ARR at the end of the third quarter was $2.83 billion, up 37% year over year.

Analysts at Mizuho lowered their price target on the stock from $165 to $135, saying the company’s third-quarter results “show slight upside to last month’s heavy pre-announcement, and cloud booking mix better than expected.” Was.

“However, we remain concerned about whether SPLK can continue to grow,” analysts said.

Analysts at Cowen, who rate Splunk in market performance, lowered their price target from $160 to $130.

Splunk shares are down 29% in the past three months and 34% so far in 2021. The Nasdaq is up 18% so far.

The stock sank in mid-November after the company’s CEO, Doug Merritt, stepped down and will be replaced on an interim basis by chairman Graham Smith. No reason was given for Merritt’s resignation, which came seven months after its Chief Technology Officer Tim Tully resigned.

Write to Joe Woelfel at [email protected]

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