Despite Large Revenue Growth Splunk Is Overvalued

Despite Large Revenue Growth, Splunk's Shares Priced for Perfection and Then Some. Numerous Catalysts Provide a Great Shorting Opportunity

Splunk (NASDAQ:SPLK), or the "Company," is the perfect example of a company that we believe is a great short candidate: the company has recently benefitted from a confluence of substantial revenue growth, good market timing and good luck (SPLK: Right Place, Right Time). Shares have skyrocketed from their IPO price of $17 in April 2012 to a current price of $70.78. This combination of fortuitous events has caused analysts and investors to project continued hockey-stick growth, lose sight of the fundamentals, and completely ignore any number of potential risks, both idiosyncratic and market-wide. We are not suggesting...

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