• Conference Call Registration

    Title:SPLK: The Wait is Over - Now is the Time to Buy SPLK
    Date: January 4, 2018
    Time: 11:00 am ET; 4:00 pm UK
    Dial-in Information: US & Canada (800) 895-7781, International (862) 255-5441

    Register Now

  • Summary

    <p><em>We took Splunk public in 2012 and have always believed in its unstructured data leadership. SPLK has had to reinvent itself after the departure of luminary former CEO Godfred Sullivan.&nbsp; Doug Merritt was handpicked to run the company, and after two years we believe he is hitting his stride and has built the right team around him. &nbsp;We believe the&nbsp;company&nbsp;has largely worked through its transition issues and should be able to sustain some of the best billings and cash flow growth in our coverage, which is not&nbsp;reflected&nbsp;in the current stock price.&nbsp;</em></p> <p><em>Despite a big move after Q3, the stock still trades at a 40-50% discount to peers on an EV/FCF/G basis, and has underperformed high growth peers by more than 50% since 2H-2013, while seeing the NTM revenue multiple contract by nearly 6 turns from 12 to 6.5x, even as high growth names have seen rev multiple expansion from 6.5 to 7.7x.&nbsp;The stock is still fairly controversial as evidenced by the magnitude of price movements during earnings. We initiate with Buy rating and a $105 price target based on 0.9x EV/FCF/Growth, a 30% discount to peers.</em></p> <p><em>We&#39;d like to invite you to a conference call Thursday January 4th at 11am Eastern to discuss:</em></p> <p style="margin-left:.5in"><em>1)</em>&nbsp;&nbsp;&nbsp;&nbsp; <em>Are recent execution issues behind the company?</em></p> <p style="margin-left:.5in"><em>2)</em>&nbsp;&nbsp;&nbsp;&nbsp; <em>Can Splunk reach its 2020 guidance targets of $2bn or revenue (75% ratable), and what is it worth?</em></p> <p style="margin-left:.5in"><em>3)</em>&nbsp;&nbsp;&nbsp;&nbsp; <em>Can Splunk succeed in the cloud while sustaining growth?</em></p> <p style="margin-left:.5in">4)&nbsp;&nbsp;&nbsp;&nbsp; <em>Will Splunk&rsquo;s stock compensation levels continue to be higher than normal? </em></p> <p><em>We hope you can join us.&nbsp;&nbsp;</em></p>