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Splunk: Baby Dumped With The Bathwater, Buy Now

Dec. 02, 2021 11:08 PM ETSplunk Inc. (SPLK)81 Comments
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Tech Stock Pros


  • Splunk shares have pulled back more than 30% following its pre-announcement and the departure of its CEO. Investors were concerned that Splunk might lower its FY2023 guidance.
  • Splunk beat F3Q estimates and guided F4Q revenue below estimates due to accelerating cloud transition. But Total F3Q and FY2023 ARR guidance was ahead of estimates, providing a significant relief.
  • Splunk's position within the industry is solid; the growth drivers are intact, and the company is in a better position than the valuation reflects.
  • Splunk is cheap on most metrics we care about when compared to its peer group. Adjusting for growth makes Splunk even more compelling.
  • We urge investors to buy shares here. A new CEO will be a positive catalyst as well as continued beat and raises we expect.
Splunk headquarters in San Francisco

Sundry Photography/iStock Editorial via Getty Images

Since the news of the CEO's departure, the shares of Splunk (NASDAQ:SPLK) have underperformed significantly. The shares have been down more than 30% since mid-November news. Investors were concerned that the CEO was forced out on slowing momentum in the

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPLK either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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