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Splunk Falls as Analysts Reassess Outlook After Earnings

Splunk trades lower after posting fiscal second-quarter sales that missed Wall Street forecasts, prompting analysts to lower their price targets.

Splunk  (SPLK) - Get Report shares traded lower on Thursday after the infrastructure software company posted fiscal second-quarter sales that missed Wall Street forecasts, prompting several analysts to lower their price targets.

Splunk shares were down 8.21% at $113.63 after the San Francisco-based company posted a wider-than-expected fiscal second-quarter loss and gave a toned-down outlook for future revenue.

Splunk said it expects second-quarter revenue of between $550 million and $570 million, while analysts had been forecasting revenue of $561.6 million, raising questions about the company’s future growth prospects.

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Morgan Stanley noted that investors “… still lack clarity on underlying growth,” and that some of the indicators of growth are “unlikely to catalyze shares.” The firm lowered its one-year target to $150 from $160 though held its equal-weight rating on the shares.

Barclays said that while the results were “solid,” Splunk “… is still in the middle of a cloud and business model transition that will continue to muddy the optics.” Analysts lowered their price target to $170 from $206 and held their overweight rating.

BMO Capital Markets said Splunk’s quarter “was not without blemishes,” and that the stock “… will remain a ‘show me’ for another few quarters.” BMO analysts lowered their price target to $144 from $150 and held their outperform rating.

Citi analysts kept their price target on Splunk at $170 and held their neutral rating, though noted the stock should remain “controversial” given “… lack of annual guidance and no clear signs of inflection in new business trends.”