• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Splunk's Swan Dive

Tech Letter

The data analytics stock Splunk (SPLK) was downgraded from outperform to neutral with a $127 target by an analyst yesterday morning.

On Wednesday, Splunk reported Q2 beats with upside revenue outlook and announced the $1.1B acquisition of SignalFx.

The stock was down 11% yesterday morning offering investors a good entry point.

Data and the analytics needed with it is all the rage and here to stay, yesterday was a good day to strap on a call spread, a bet that the stock will stay above $100 by September 20th.

Splunk Inc. provides software solutions that enable organizations to gain real-time operational intelligence in the United States and internationally.

Its products enable users to investigate, monitor, analyze, and act on data regardless of format or source.

Splunk yesterday announced that it had acquired SignalFx for a total price of about $1.05 billion.

Approximately 60% of this will be in cash and 40% in Splunk common stock. The companies expect the acquisition to close in the second half of 2020.

SignalFx, emerged from stealth in 2015, provides real-time cloud monitoring solutions, predictive analytics and more.

This acquisition will give Splunk an edge in observability and actions per minute (APM) for organizations at every stage of their cloud journey, from cloud-native apps to homegrown on-premise applications.

Splunk will become a power player in the cloud space as it expands its support for cloud-native applications and the modern infrastructures and architectures those rely on.

Big data generates revenue in modern business period.

Dealing for SignalFx directly lifts Splunk in position at the cutting edge of monitoring and observability at massive scale.

SignalFx will support the continued commitment to giving customers one platform that can monitor the entire enterprise application lifecycle.

This deal is about growing a larger pie for everyone, so it's a commendable move that should help Splunk maintain its sales momentum.

Splunk is in an industry expanding fast with global spending on cloud services and infrastructure set to double by 2023, again according to IDC.

Splunk faces a few headwinds such as negative free cash flow and part of the reason is the result of a transition in renewable licensing contracts and subsequent revenue recognition.

Splunk will soon debut their new pricing plans, reducing the cost of its data volume-dependent model to help its customers run more information through the Splunk system.

Free cash flow is now at negative $120 million so far this year, compared to positive $102 million through the first half of last year.

Mushrooming top-line growth for this software company and management giving another upgrade to full-year expectations are the short-term catalysts boosting shares.

Splunk is one of the premium data analytics play out there and a compelling long-term buy.

 

 

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2019/08/momentum.png 362 835 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2019-08-23 02:02:322019-08-23 01:52:26Splunk's Swan Dive
You might also like
Technology and the Minimalist Millennial
December 7, 2020
July 6, 2020
The Opportunities in Big Data
August 23, 2019

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: August 23, 2019 - Quote of the Day Link to: August 23, 2019 - Quote of the Day August 23, 2019 - Quote of the Day Link to: August 23, 2019 Link to: August 23, 2019 August 23, 2019
Scroll to top