Needham just initiated coverage of this big data company’s shares with a ‘Buy’ rating. The company is expected to grow at more than 42% per year over the next five years.
Splunk Inc. (SPLK)
From Technology & Opportunity
Splunk’s products and offerings focus specifically on mining machine-generated data or information produced by phones, tablets, computers, and the cloud. Splunk pulls this information out of large data lakes to make it accessible to its customers.
The company’s flagship product is the Splunk Enterprise and at its core is a proprietary machine data engine, comprised of collection, indexing, search, reporting, analysis, and data management capabilities. The firm’s clients include some of the biggest brands in the world, such as Amazon, Coca-Cola, and Verizon.
Splunk reported second-quarter earnings on August 24, 2017.Here is a brief synopsis of our detailed analysis. Splunk posted total revenue for the period of $280 million, which is up 32% from the previous year. Total service billings came in at $303 million, which is up 32% from the second quarter last year. Cloud revenue totaled $21.3 million, with overall software revenues growing by 30% year-over-year.
Over the course of the quarter, Splunk’s existing customers expanded their Splunk deployments. The company also gained 500 new customers. This overall was a positive earnings report, with revenue reflecting Splunk’s recent effort to get more companies to adopt its product. Over the course of the quarter, Splunk saw an increased demand for its Splunk platform and other premium applications.
On a note outside of that earnings report, Splunk also made a promising acquisition this month. The company acquired Rocana assets on October 9th. Rocana, Inc. is a privately held technology company offerings analytics solutions for the IT market. Splunk has acquired the technology and intellectual property assets of Rocana. The company did not disclose what it paid in the course of the acquisition. This is a good move for Splunk, which can use Rocana’s technology and team to further its machine learning platform. Any knowledge on machine learning gained from this can be applied across the Splunk product line.
Splunk is a company committed to analytics. Successfully implementing machine learning can help the company collect more accurate data and monitor security.
We rate Splunk Inc. a “Buy” under $65. The risk level is “Medium High.”
Jason Stutman, Technology & Opportunity, www.angelpub.com, 877-303-4529, October 2017