UBS, which had kept a Neutral rating on Splunk (SPLK +5%) for a long time due to valuation concerns, has upgraded shares to Buy. The machine data analytics leader has made fresh highs in response.
Curiously, UBS says it's upgrading Splunk precisely because the company's multiples have expanded (its EV/sales ratio now stands at a steep 20), defying expectations that they wouldn't, and because the firm now expects Splunk to maintain a similar valuation in 2014.
Like other firms, UBS touts Splunk's big data credentials, and forecasts strong margin expansion going forward.
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