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Why shares in Splunk Fell on Friday



What happened

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Shares of Splunk Inc . (NASDAQ: SPLK) fell 7.3% on Friday despite the firm who reported strong first-quarter financial income as analysts focused instead on the software company weak cash flow guidance and slow down customer gains. "data-response time =" 12 "> Shares of Splunk Inc . (NASDAQ: SPLK) fell 7.3% on Friday, despite the company reporting strong first-quarter financial results, as analysts instead focused on the software company's weak cash flow guidance and slow down customer gains.

So what [19659003] After the markets closed on Thursday night, Splunk, a data analysis software vendor, reported an adjusted first-quarter fiscal result of $ 0.02 per. Share on a turnover of DKK 425 million. USD. It was easy to close analyst consensus for a $ 0.14 loss. Share of DKK 395 million USD in sales. The company also increased the $ 2.25 billion from $ 2.2 billion throughout the financial year's revenue guidance, which implies a sum upside of consensus $ 2.22 billion estimates.

A stock chart on a tablet.

Image Source: Getty Images.

The company exceeded most metrics for the quarter, but a number of analysts took a half empty picture of the results. After earnings, BMO Capital Analyst Keith Bachman lowered his price target to $ 157 from $ 162 due to "uncertainty" about Splunk's growth rates and free cash flow penetration, although he said the value remains attractive.

Guggenheim analyst Imtiaz Koujalgi also lowered his price target to $ 115 from $ 125, saying operating cash flow could be a headwind for the whole year. And Piper Jaffray's Alex J. Zukin noted that the company "meaningfully" cut the cash flow operating forecast to $ 250 million from $ 350 million, and that management expressed disappointment over the number of new customers added in the quarter.

Now what

] The quarter may not have been perfect, but as Bachman notes there is still much to suffer about the performance. Prior to the revenue release, Splunk shares had been up 30% year to date and more than doubled over the past three years.

The company is still moving in the right direction, but armed with an indication that Splunk & # 39; s speed may be slower, investors on Friday expected best to order some gains.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm More from The Motley Fool " data-response time = "32"> More from The Motley Fool

<p class = "canvas-atom canvas- text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "[19659014] Lou Whiteman has no position in any of the aforementioned shares. Fool owns and recommends Splunk. Motley Fool has a disclosure policy . "data-response time =" 40 "> Lou Whiteman has no position in any of the listed shares. Motley Fool owns and recommends Splunk. Motley Fool has an information policy.


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