NEW YORK (TheStreet) -- Splunk's (SPLK) - Get Report stock price target was upped at Barclays to $56 from $51 this morning after the San Francisco-based software solutions provider reported solid second-quarter earnings and revenue following yesterday's market close.
Splunk posted earnings of 5 cents per share, above Wall Street's estimated 3 cents per share. Revenue came in at $212.8 million, beating analysts' projected $200.5 million in revenue.
As a result, Barclays raised its 2016 earnings outlook by a penny to 31 cents per share. The firm maintained its "equal weight" rating on Splunk stock.
Barclays highlighted the company's cloud segment growth of 200% year-over-year and the fact that deals exceeded a $100,000 run rate for the most recent period.
However, the firm noted that Splunk's growth is enabled by immense stock-based compensation grants and limited leverage. Investors are also becoming increasingly concerned about a growing gap between GAAP and non-GAAP numbers, Barclays added.
Barclays said Splunk's growth story remains solid, but that it's remaining "on the sidelines" for the near term.
Splunk stock closed lower by 10.11% to $58.52 on Friday.
Separately, 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. TheStreet Ratings has this to say about the recommendation:
We rate SPLUNK INC as a Sell with a ratings score of D. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. 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.
You can view the full analysis from the report here: