Splunk outperforms on JMP note; VMware takes fresh aim

Citing positive checks and "recent due diligence" regarding two privately-owned rivals, JMP has hiked its FQ1 Splunk (SPLK +0.4%) revenue forecast by $1M to $83M (above an $80.7M consensus), and is reiterating an Outperform ahead of the company's May 29 report. Shares are up slightly on a down day for equities.

With shares now at $44, JMP has decided to slash its PT by $44 to $66. Its new target spells a valuation of 8.6x EV/2016E sales. "Our target multiple decreases as multiples of other stocks in Splunk's high-growth peer group have declined significantly.”

Morgan Stanley (Equal-Weight) is a little more cautious: Though upbeat about Splunk's long-term opportunity, the firm thinks "a slowdown in productive sales capacity growth, price cuts and increasing competition represent [near-term] tactical headwinds."

The notes arrive as VMware (VMW -2.8%), hungry to grow its non-virtualization revenue base, takes aim at Splunk by launching the second-gen version of its vCenter Log Insight machine/log data analytics software (previous).

VMware claims the product, aimed at Splunk's core IT operations market, delivers a 6x improvement in query performance, as well as new machine learning tech that "automatically groups related data."

Previous: Analysts return from Splunk conference with high praise

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Comments (5)
  • texasredraider
    , contributor
    Comments (68) | Send Message
    Not the least bit concerned by VMware or Sumo. Splunk will remain the undisputed leader and their lead will just continue to grow. I love it when old tech, comes after the new disruptive technology on the block and they fail miserably. History is littered with examples.
    20 May 2014, 04:10 PM Reply Like
  • bgold1955
    , contributor
    Comments (2351) | Send Message
    Guns Up!!!
    20 May 2014, 04:12 PM Reply Like
  • YO!VMW
    , contributor
    Comments (2) | Send Message
    Well when VMW offers the solution Log insight using in conjunction with other VMW tools, Splunk is of no use. Consider this VMW knows its own products and working and how to tie data to form information whereas Splunk has to go infer indirectly ... always advantage VMW over SPLUNK in case of analytics with VMW product family ...
    20 May 2014, 06:43 PM Reply Like
  • YO!VMW
    , contributor
    Comments (2) | Send Message
    VMW knows its products and how they work in tandem. Now SPLUNK has to infer information whereas VMW knows how to, so in conjunction with other VMW products its always good to go with Log Insight a perfect tool.
    20 May 2014, 06:43 PM Reply Like
  • John Symthe
    , contributor
    Comment (1) | Send Message
    As OpenStack, KVM and others slowly eat away at VMWare...they will have to expand into new markets. The big data market is a growing one for sure. Beware of logstash and others..the market should be interesting in the coming year. I have to say I love Splunk but at some point, their pricing become prohibitive.
    22 May 2014, 12:01 PM Reply Like
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