Is Splunk's Stock Surge Backed By FY Forecast? 4 Analysts Examine FQ2 Results

Shares of Splunk Inc SPLK rallied in early trading on Thursday, after the company reported fiscal second-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Mizuho Securities On Splunk

Analyst Gregg Moskowitz maintained a Neutral rating, while raising the price target from $108 to $116.

Splunk reported “decent” fiscal second-quarter results, with annual recurring revenue (ARR) growth of 16% year-over-year, slightly ahead of expectations, Moskowitz said in a note.

“More positively, operating margins were significantly above, and F2H margin and FCF guidance was meaningfully raised,” the analyst stated “That said, SPLK's cloud revenue/cloud ARR once again came in below our expectations,” he added.

Wedbush On Splunk

Analyst Taz Koujalgi reiterated a Neutral rating, while listing the price target from $86 to $105.

“SPLK reported a good quarter with all metrics coming in above Street expectations,” Koujalgi wrote in a note. “The highlight of the quarter was the highest ever sequential growth in Net New ARR, more than doubling from prior quarter,” he added.

If the company is able to maintain the current momentum and execution, “there could be upside to ARR and FCF for the year,” the analyst further stated.

Check out other analyst stock ratings.
BMO Capital Markets On Splunk

Analyst Keith Bachman reaffirmed an Outperform rating, while raising the price target from $117 to $127.

“Splunk delivered another solid quarter of results and guidance, highlighted by growth in net new ARR for the first time in six quarters, and another raise to FY24 FCF guidance,” Bachman said. The projections for the back half of fiscal 2024 “appear comfortably achievable,” he added.

“New leadership is developing a track record for consistency, which, combined with ongoing low investor expectations, creates a positive set-up for the shares over the near and medium term, in our view,” the analyst further wrote.

Oppenheimer On Splunk

Analyst Ittai Kidron maintained an Outperform rating and price target of $115.

“The company is seeing sustained demand for its hybrid platform and broad-use case applicability, with mgmt. highlighting strong momentum for security and observability,” Kidron stated in a note.

“Overall, we come away positive and believe the improvements in operating efficiency position the company to deliver an attractive balance of growth and profitability and expect mgmt. to focus investments on NT growth opportunities (security, observability, international), which can help accelerate new logo wins and NNARR growth,” he added.

SPLK Price Action: Shares of Splunk hwere up 13.95% to $113.88 at the time of publication Thursday.

Now Read: Bids For Sealed iPhone From 2007 Skyrocket To $45,000, Fetching 75x Its Original Price