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Thursday, November 16, 2017

=Splunk (SPLK) reported earnings on Thur 16 Nov 17 (a/h)



Splunk beats by $0.03, beats on revs; guides JanQ revs above consensus; guides FY19 revs above consensus 
  • Reports Q3 (Oct) earnings of $0.17 per share, excluding non-recurring items, $0.03 better thanthe Capital IQ Consensus of $0.14; revenues rose 34.3% year/year to $328.65 mln vs the $309.24 mln Capital IQ Consensus and vs prior guidance of $307-309 mln.
    • Non-GAAP operating margin was positive 9.8% vs 6.8% in the prior year period.
  • Co issues upside guidance for Q4 (Jan), sees Q4 revs of $388-390 mln vs. $383.7 mln Capital IQ Consensus Estimate. Sees Q4 non-GAAP operating margin of 16%.
  • Co issues upside guidance for FY19, sees FY19 revs of approx $1.55 bln vs. $1.53 bln Capital IQ Consensus Estimate. Sees FY19 non-GAAP operating margin of 10.5%.
  • Co signed more than 450 new enterprise customers in OctQ. 

BMO Capital Marketsraises their SPLK tgt to $83 from $71; ,They are raising their FY19 FCF estimate to $320 million from $303 million. Given improved billings growth to 38% y/y in the October Q, compared to an average of 31% y/y in the two previous Q, they are raising their target multiple from approximately 30x EV/FY19 FCF to 33x-34x, which would represent a premium to our projected FY19 revenue growth estimate of about 1.3x vs. their previous assumption of 1.0x.
Needham:They believe yesterday's strong FY3Q18 report may finally serve to reinvigorate the shares. Reiterate BUY recommendation and $95 pricetarget. Overtime they believe cash flow from operations will increase linearly from 15% in FY18E to 24% in its steady state year of FY27E.
Oppenheimer:Broad-based Momentum Drives Yet Another Consensus-beating Quarter; Raises Guidance
Stifel: They note 3Q represented Splunk's strongest cloud quarter yet, and included the company closing its two largest cloud deals in history. Overall, they continue to be impressed with the progress Splunk is making on its transition to the cloud and the seemingly quick turnaround in Europe. They are raising their target price to $75. 

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