Trade-Ideas LLC identified

Splunk

(

SPLK

) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Splunk as such a stock due to the following factors:

  • SPLK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $104.9 million.
  • SPLK is down 2.3% today from today's close.

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More details on SPLK:

Splunk, Inc. provides software products that enable organizations to gain real-time operational intelligence in the United States and internationally. The company's products enable users to collect, index, search, explore, monitor, and analyze data regardless of format or source users. Currently there are 21 analysts that rate Splunk a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Splunk has been 1.9 million shares per day over the past 30 days. Splunk has a market cap of $6.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.91 and a short float of 14% with 5.94 days to cover. Shares are down 17.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Splunk as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • 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 50.3% when compared to the same quarter one year ago, falling from -$48.55 million to -$72.97 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness 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 share price of SPLUNK INC is down 12.87% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • SPLUNK INC's earnings per share declined by 42.5% in the most recent quarter compared to 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 -$1.81 versus -$0.75 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus -$1.81).
  • The gross profit margin for SPLUNK INC is currently very high, coming in at 85.58%. 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 -41.83% significantly underperformed when compared to the industry average.

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