#SPLK SEEKING ALPHA INSTALL#
#SPLK SEEKING ALPHA FULL#
#SPLK SEEKING ALPHA SOFTWARE#

After we net off the $1.83 billion of cash and $3.87 billion of debt on Splunk's most recent balance sheet, the company's resulting enterprise value is $16.89 billion. At current share prices near $92, Splunk trades at a market cap of $14.85 billion. In spite of all of these merits, Splunk's persistent stock price decline has led to its most attractive valuation ever. I see significant opportunity for Splunk to expand its presence outside of the U.S. Currently, only about ~35% of its revenue base comes from international markets (and an even smaller ~20% slice of the cloud business is overseas). Splunk has become a global brand name, and it's time for Splunk to chase more opportunities overseas. Significant international expansion opportunity. These commendations don't come lightly to IT buyers when making a purchase decision.

#SPLK SEEKING ALPHA SOFTWARE#

Gartner, the software industry's leading analyst and reviewer, has bestowed the 'Leader' designation to Gartner in the security information and event management space, and also named it as the vendor with the highest ability to execute.

More to the point above, it's fine to have competition when Splunk also is widely considered the best-in-breed vendor for machine data analytics. We note as well that Splunk's ~$3.3 billion annual revenue scale makes it twice as large as its next-closest competitor, Datadog.

Splunk focuses on visualizing and analyzing machine data (information passively generated by computers, phones, and other endpoints within networks). The company's closest large/public peers are the monitoring companies like Datadog (NASDAQ: DDOG) and New Relic (NYSE: NEWR), which primarily focus on monitoring the performance and uptime of applications and infrastructure. It's also the largest company in the space. Splunk isn't without competitors, but the company's focus on machine data is unique.

#SPLK SEEKING ALPHA INSTALL#

As data volumes continue to explode and companies push the boundaries of how they integrate data into operations and decision-making, Splunk has a tremendous opportunity to derive growth from within its install base. Splunk's platform is charged on a data volumes/computing power basis. Some of the most successful software stocks are usage-based, meaning that revenue climbs proportionally to a customer's usage of the product.

But as Splunk has evolved, the company's machine data capabilities are applicable across virtually any industry and across many functions. In its early days, Splunk's machine data-mining capabilities were often used for security purposes to flag and respond to anomalies within corporate systems.

#SPLK SEEKING ALPHA FULL#

Here is a full rundown of the reasons to be bullish on Splunk: Splunk, in particular, estimates its TAM at a whopping $100 billion: On a longer-term view, investors should remember that big data is one of the broadest and most lucrative markets in enterprise software. And in acknowledgement of its strong execution year to date, Splunk boosted its guidance outlook for FY23. Customers are expanding their contracts, and cloud is now at sufficient scale to allow for significant margin expansion. Growth is exceeding 30% y/y, and the company is finally reaping the benefits of its multi-year cloud transition. On a short-term basis, the company is hitting on all the right notes. It's an excellent time, in my view, for investors to take a hard second look at this name.ĭata by YCharts Splunk's $100 billion TAM and the long-term bull case This is milder than most tech stocks, but do note that Splunk did see a major squeeze downward in November (again, due more to sentiment than to fundamentals) - over the past year, the stock is down 36%. Year to date, shares of Splunk have fallen ~20%. Originally used primarily for security purposes, Splunk's use cases have since evolved across the full spectrum of business analytics.

It specializes in 'machine data', helping companies gather and analyze the data generated by their internal technology assets. Splunk, for investors who are unfamiliar with the name, is a large-cap big data software stock. Splunk ( NASDAQ: SPLK ), for example, has fallen to multi-year lows not seen since 2018 despite the fact that the business has never looked healthier. While I understand the shift toward a more cautious investing attitude this year due to heightening macro risks, the declines in several individual stocks have far exceeded what fundamentals should allow. David Tran/iStock Editorial via Getty Images

Splk seeking alpha