NEW YORK (TheStreet) -- Shares of Splunk (SPLK) - Get Report are down 0.2% to $54.23 in early afternoon trading on Wednesday, ahead of the company's 2017 fiscal first quarter results, due out after tomorrow's closing bell.
Wall Street is expecting the San Francisco-based software products provider to post a loss of 2 cents per share on revenue of $174.1 million for the most recent quarter.
Last year, Splunk reported an adjusted loss of one cent per share on revenue of $125.7 million.
Splunk is one of those highly volatile names that can provide some great profit opportunities -- when it trends. As we see from the chart, this stock has created a wide range over just the past few months.
The gap lower in February seemed devastating, but Splunk got its energy back following a strong earnings report a few weeks later. That move left a big gap in the chart, and the following weeks saw this stock making higher highs and higher lows in a straight line (not much volatility -- see the big arrow in the chart, below)
Recently, Splunk pulled back to support and put in a higher low on the chart, and now we see the stock trading above the 200-day moving average for the first time in many months. The Moving Average Convergence Divergence (MACD) is now on a buy signal. Although we see an overbought condition, we should see the stock trade back to the 50-day moving average, which would be a good stop to add the position. Volume trends have been very strong and positive.
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Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
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.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SPLK