Shares of Splunk (NASDAQ:SPLK) gained more than 9% in Wednesday’s after-hours trade, thanks to its better-than-expected Q3 results and upbeat forward guidance. The company provides software solutions that allow users to monitor, investigate, and analyze data, thereby helping in operational decision-making.
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Splunk reported adjusted EPS of $0.83 per share, surpassing the analysts’ expectations of $0.25 per share. Also, the figure compares favorably with a net loss of $0.35 per share in last year’s quarter.
Moreover, revenues increased by 40% to $929.8 million, which beat the consensus estimate of $847.5 million. The growth can be attributed to strong demand for term licenses from Splunk’s existing customers as well as higher revenues from cloud services.
Based on its Q3 performance, the company has raised its guidance for full-year revenue to $3.46-$3.49 billion from the prior guidance range of $3.35-$3.4 billion. Further, for the fourth quarter, Splunk expects to report revenue in the range of $1.06 billion and $1.09 billion.
Should You Buy SPLK Stock?
The Wall Street community is clearly optimistic about SPLK stock. Splunk commands a Strong Buy consensus rating based on 15 Buy and five Hold recommendations. The stock average price target of $114.50 implies 47.4% upside potential.
Furthermore, SPLK stock has a positive signal from hedge funds. Our data shows that hedge funds bought 376.2K shares of Splunk last quarter. Overall, the stock scores a 8 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to outperform market averages.
