Splunk (NASDAQ:SPLK) delivered better-than-expected results for the fourth quarter of Fiscal Year 2023, with revenues crossing the $1 billion mark for the first time. SPLK shares, however, trended lower in Wednesday’s after-hours trading as the company failed to impress investors with its guidance.
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The company provides software solutions allowing users to monitor, investigate, and analyze data, helping in operational decision-making.
Adjusted earnings of $2.04 per share surpassed analysts’ expectations of $1.14 and increased significantly from $0.66 per share in last year’s quarter. Meanwhile, revenues climbed 39% to $1.25 billion and beat the consensus estimate of $1.08 billion. The upside was due to strong demand for term licenses and higher cloud services revenues.
In the reported quarter, Splunk witnessed 790 customers with total annual recurring revenue greater than $1 million, up 115 customers from the same quarter last year.
For Fiscal Year 2023, the company reported a 37% year-over-year jump in revenues to $3.65 billion. Further, the adjusted EPS of $2.69 compares favorably with a loss of $1.25 per share.
Regarding guidance, the company has provided a cautious outlook, based on current macroeconomic conditions and market uncertainty. It expects fiscal Q1 revenue between $710 million and $725 million. Moreover, for Fiscal Year 2024, Splunk anticipates revenue in the range of $3.85 billion to $3.9 billion.
Is Splunk Stock a Buy or Sell?
The Wall Street community is cautiously optimistic about SPLK stock. Splunk has a Moderate Buy consensus rating based on 13 Buy and nine Hold recommendations. The stock average price target of $116.06 implies 13.3% upside potential.
Furthermore, the stock has a positive signal from hedge funds. Our data shows that hedge funds bought 801.5K shares of Splunk last quarter. Also, Splunk sports a “Perfect 10” Smart Score on TipRanks, implying it has the potential to beat the broader market averages.
