3 Stocks Pushing The Technology Sector Lower
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.The Technology sector as a whole closed the day down 0.7% versus the S&P 500, which was unchanged. Laggards within the Technology sector included Video Display (VIDE), down 4.5%, BTU International (BTUI), down 2.6%, Advanced Photonix (API), down 9.6%, Nortech Systems (NSYS), down 2.0% and Technical Communications (TCCO), down 17.8%.TheStreet Ratings Group would like to highlight 3 stocks that pushed the sector lower today:Splunk (SPLK) is one of the companies that pushed the Technology sector lower today. Splunk was down $4.16 (8.6%) to $44.07 on heavy volume. Throughout the day, 5,172,614 shares of Splunk exchanged hands as compared to its average daily volume of 3,285,200 shares. The stock ranged in price between $43.96-$48.50 after having opened the day at $48.23 as compared to the previous trading day's close of $48.23. Splunk, Inc. provides software solutions that provide real-time operational intelligence in the United States and internationally. Splunk has a market cap of $5.5 billion and is part of the computer software & services industry. Shares are down 29.8% year-to-date as of the close of trading on Monday. Currently there are 14 analysts who rate Splunk a buy, no analysts rate it a sell, and 6 rate it a hold.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.TheStreet Ratings rates Splunk as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share.Highlights from TheStreet Ratings analysis on SPLK go as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 429.6% when compared to the same quarter one year ago, falling from -$6.16 million to -$32.63 million.
- SPLUNK INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SPLUNK INC reported poor results of -$0.75 versus -$0.39 in the prior year. This year, the market expects an improvement in earnings ($0.00 versus -$0.75).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Software industry and the overall market, SPLUNK INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SPLUNK INC is currently very high, coming in at 90.99%. Regardless of SPLK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SPLK's net profit margin of -32.66% significantly underperformed when compared to the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
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