Splunk Reports Strong Quarter On Cybersecurity Demand: These 4 Analysts Deep Dive Into Q3 Print

Splunk Inc SPLK shares were rising in early trading on Wednesday after the company reported upbeat third-quarter results.

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

Truist Securities On Splunk

Analyst Joel Fishbein downgraded the rating from Buy to Hold, while keeping the price target unchanged at $157.

Splunk “delivered a solid quarter of execution with revenue and non-GAAP operating profit coming in ahead of our expectations and guidance,” Fishbein said in the downgrade note.

He added that Cisco Systems Inc.'s CSCO plans to acquire the company for $157 per share in cash is favorable for Splunk’s shareholders and could close by the end of 2024.

Mizuho Securities On Splunk

Analyst Gregg Moskowitz reiterated a Neutral rating and price target of $157.

“SPLK reported partial F3Q results that were modestly above expectations,” Moskowitz wrote in a note. Total ARR growth was in-line with estimates, while Cloud ARR growth modestly exceeded expectations and now comprises more than 50% of total ARR, he added.

“Given the rising importance of cybersecurity and observability in today's increasingly digital and complex IT environment, the logic behind CSCO's decision to acquire SPLK is understandable, and we believe CSCO is gaining this asset at a reasonable price,” the analyst further wrote.

Check out other analyst stock ratings.

Needham On Splunk

Analyst Mike Cikos reaffirmed a Hold rating on the stock.

“NG OpEx declined 1% yr-yr despite Total ARR climbing 15% yr-yr,” Cikos said. “We note expense discipline and efficiency have been Splunk's hallmark under the tenure of CEO Gary Steele and CFO Brian Roberts,” he added.

The company did not provide any guidance due to its pending purchase by Cisco, the analyst further noted.

KeyBanc Capital Markets On Splunk

Analyst Michael Turits maintained a Sector Weight rating on the stock.

Splunk reported strong quarterly results, with ARR slightly higher and EBIT margins nearly 6 points above consensus, Turits said. Cloud ARR drove the upside, while “Cloud bookings mix came in at 60% vs. management's prior expectation for reaching the low end of 55-65%,” and Cloud gross margins expanded to 74.6%, from 73.8% in the previous quarter, he added.

“Revenue beat consensus by 4%, driven by license upside, partially offset by slight misses on cloud revenue and maintenance/services revenue,” the analyst further wrote.

SPLK Price Action: Shares of Splunk were trading almost flat at $151.15 at the time of publication Wednesday.

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