Splunk (SPLK) - Get Report  is gently lower Monday even after analysts at Goldman Sachs turned bullish on the stock, upgrading the data-analysis-software company to buy from neutral and raising their price target to $180 a share from $147. 

Goldman's bullish turn was sparked by the company's updated pricing model, which charges by use, enabling customers to choose differently priced services. 

Secondly, Splunk switched its accounting standard to annual recurring revenue, a more widely used standard, from ASC 606. The company's new accounting shows 53% growth in the third quarter, which was better than Goldman expected. 

"For a company that is growing annual recurring revenue over 50%, and should continue to grow at least mid-40% through next year per management guidance, we see Splunk's current valuation of 8 times calendar year 2020 sales as undemanding vs. 20% to 30% software growers trading at an average of 11 times and 30%-plus growers trading at an average of 16 times," analyst Christopher Merwin.

The firm also likes Splunk's recent acquisition of SignalFX, estimating that the company could contribute $84 million in revenue in 2020. 

The company introduced three new pricing models in September, a catalyst that Goldman Sachs says will allow for increased usage by customers. 

"We believe the introduction of these new pricing models should enable better visibility and predictability of costs for customers and should improve Splunk's competitive positioning," Merwin wrote. 

Splunk shares are up more than 40% year to date and were off 0.54% at $148.41 at last check Monday.

Goldman's new price target indicates 20% upside from Splunk's Friday closing price.