Splunk Inc. (NASDAQ: SPLK) has confirmed its Q3 2021 earnings release date expected to be on Wednesday, December 1, 2021, before markets close.
What to look for
Recently the company held its yearly .conf virtual conference and unveiled various innovations to the observable platform. Among the things, Splunk launched include a range of enhancements to the platform like additional customization, cloud platform, and improved cybersecurity features. The company is undergoing a transition to a cloud-based SaaS product which has had an impact on revenue considering cloud subscription is taken over a protracted period instead of up-fo9rnt perpetual software licenses.
Earnings: Stockearning’s Estimated EPS for Q3 2021 will surpass Q2 2021 EPS of $0.62. Historical EPS Performance shows that the company has topped estimates in four quarters (33%) out of the last 12 quarters and missed eight times (66%).
Revenue: The company expected revenue of $640.5 million compared to $558.57 reported a year ago, representing a YoY growth of 14.7%. For the full year, the company expects sales of $2.57 billion, and for the next financial year, the company is expected to post revenue of $3.09 billion.
Stock movement: Since the last earnings release, SPLK stock has lost 14.5. Splunk shares have been UP 19 times out of the last 38 quarters after releasing earnings. So, the historical price reaction suggests a 50% probability of the share price going UP once Splunk releases its earnings. According to the Stockearning algorithm, the predicted first-day move is 8%, while the predicted move on the seventh day is 10%.
What analysts are saying
Credit Suisse analyst Phil Winslow commenced coverage on Splunk with a "Buy" rating and price target of $225. Winslow believes the sustainability of the growth of Splunk’s core index and transition to the cloud, plus the company's foray into data streaming, will enable the company to grow revenue annually by 25% to 30%. Winslow told investors in a research note that the growth has not been reflected in SPLK’s valuation.
Argus’s Joseph Bonner said that the abrupt dismissal of the company’s CEO weeks before the release of Q3 2021 earnings was unexpected. The analyst maintained a “Buy” rating in the stock and kept his price target of $198. Bonner said that the stock had a good run during Meritt’s term as CEO, gaining 146%. The analyst is waiting for the Q3 results and management commentary before he can review his rating in Splunk.
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