Shares of Splunk (SPLK) fell from $99.84 at the start of November to $87.87 on November 20. The stock has since recovered and has risen 25% to close at $110.07. It’s currently trading 15% below its 52-week high of $130.
Splunk stock has risen 33% in 2018. The stock has risen 95% in the last three years and 62% in the last five years. Since the start of the fourth quarter, its shares have fallen 9%. Splunk’s sales rose 540% from $199 million in fiscal 2013 to $1.27 billion in fiscal 2017. This revenue growth drove its stock higher.
Revenue and earnings expansion
Analysts expect Splunk’s sales to rise 33% YoY (year-over-year) to $1.69 billion in fiscal 2019 (which ends in January), 24.2% YoY to $2.16 billion in fiscal 2020, and 22% to $2.63 billion in fiscal 2021. The company’s EPS are expected to rise 77.4% to $1.1 in fiscal 2019, 42.7% to $1.57 in fiscal 2020, and at a compound annual growth rate of 40.6% over the next five years.
Splunk isn’t expected to be profitable on the basis of generally accepted accounting principles, at least in the near future. Its net margin is expected to expand from -15% in fiscal 2019 to -4.4% by the end of fiscal 2021.
Of the 43 analysts covering Splunk, 33 have given it “buys,” ten have given it “holds,” and none have given it “sells.” The average 12-month stock price target for Splunk is $131.22, indicating a potential upside of 19%.