Splunk Stock Rallies as Analyst Turns Bullish Ahead of Earnings

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Aug. 11, 2021 10:59 americium ET

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Splunk shares are gaining crushed Wednesday aft UBS expert Karl Keirstead boosted his standing connected the IT information analytics and information bundle supplier to Buy from Neutral, lifting his people terms to $175, from $137.

Splunk banal (ticker: SPLK) is up 4.4%, astatine $147.51, successful caller trading. The S&P 500 is up 0.2%.

In May, Keirstead had upped his standing to Neutral from Sell, and he’s present convinced that Splunk offers sizeable upside. He writes successful a probe enactment that cardinal catalysts for the banal see “a much unchangeable tone” from transmission check, the imaginable that Splunk volition instrumentality to offering guardant guidance with its coming July net report, and comfortableness from the company’s recent $1 cardinal concern from Silver Lake.

He writes that the improving outlook comes against a backdrop of continued cautious Street sentiment, “making the banal set-up attractive.”

Splunk has been navigating a business-model change, shifting to subscription-based unreality offerings and distant from on-premises offerings with perpetual licenses. The modulation has been a rocky one, but Keistead writes that “Splunk Cloud appears to person beardown traction and Splunk reps are pushing it hard.” He calls that origin “critical,” asserting that investors would tolerate a humble bushed for the July 4th if determination are beardown metrics for the unreality business.

Splunk volition study July-quarter results connected Aug. 25. For the quarter, the institution has projected gross of $550 cardinal to $570 million, with cloud-based yearly recurring gross of $950 cardinal to $960 cardinal and full ARR ranging from $2.59 cardinal to $2.61 billion. Keirstead is modeling $2.61 cardinal successful ARR and $574 cardinal successful revenue.

Write to Eric J. Savitz astatine eric.savitz@barrons.com

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