Splunk was founded 20 years ago to streamline and organise corporate data, a resource that’s often inaccessible and underutilised.
Nasdaq-listed Splunk has a market cap of $16.50 billion, but that might grow further following blowout Q2 earnings of 71 cents, up from just 9 cents in Q2 2022.
Splunk also guided higher for Q3 23 and now expects quarterly revenue to be more than $1.0 billion and full-year sales to be around $3.92 billion.
A dozen brokers including UBS and Morgan Stanley, have raised their Splunk price targets post-earnings and the stock is up +16% in the last 5 days.
Against that, Splunk’s cost of revenues grew by $12.0 million, contributing to an operating loss in Q2 of $68.50 million.
Added to this Splunk currently trades at a price-to-cash flow ratio of more than 209 times.
Splunk is a growth stock with an addressable market of more than $100 billion, A recent strategic collaboration with Microsoft’s Azure cloud, could help the company reach its potential.