Splunk (SPLK) closed at $140.36 in the latest trading session, marking a -0.34% move from the prior day. This move was narrower than the S&P 500's daily loss of 0.92%. Elsewhere, the Dow lost 1.17%, while the tech-heavy Nasdaq lost 0.28%.
Prior to today's trading, shares of the maker of software that helps companies collect and analyze internal data had gained 28.4% over the past month. This has outpaced the Computer and Technology sector's gain of 16.87% and the S&P 500's gain of 15.69% in that time.
SPLK will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.96, up 4700% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $445.69 million, up 4.91% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.08 per share and revenue of $2.54 billion, which would represent changes of -95.74% and +7.78%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for SPLK. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.24% lower. SPLK is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that SPLK has a Forward P/E ratio of 1720.18 right now. Its industry sports an average Forward P/E of 44.51, so we one might conclude that SPLK is trading at a premium comparatively.
It is also worth noting that SPLK currently has a PEG ratio of 59. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.8 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 38, putting it in the top 15% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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