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Comparing Splunk’s and Peers’ Valuation

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Comparing market capitalization

On May 15, Splunk’s (SPLK) market capitalization was $16.4 billion, outsizing peers Teradata (TDC) and Tableau Software (DATA), which had market caps of $4.6 billion and $7.5 billion, respectively.

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Splunk’s valuation metrics

The graph above compares Splunk’s, Teradata’s, and Tableau’s market caps. On May 15, Splunk was trading at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of ~65.7x. In contrast, Teradata and Tableau had forward EV-to-EBITDA multiples of ~11.7x and ~314.0x, respectively. Splunk’s price-to-free cash flow multiple was ~67.6x, whereas peers Teradata and Tableau had multiples of ~28.3x and ~49.9x, respectively.

Bollinger Band

On May 15, Splunk stock closed at $115.10, close to its lower Bollinger Band of $96. This value suggests that the stock is oversold, and investors could take it as a “buy” signal.

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Short interest ratio

On May 15, Splunk stock’s short interest as a percentage of its shares outstanding (or short interest ratio) was ~2.9%. Generally, a short interest ratio greater than 40.0% suggests an impending stock price fall.

Historic stock returns

Splunk stock has risen 65.6% in the last year and 8.6% in the last month. The stock has fallen 0.05% in the last five days.

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