Macquarie Initiates Splunk With Outperform Rating, $59 Price Target

Splunk Inc (NASDAQ: SPLK) shares have been trending lower over the past 12 months and are down 24 percent. Macquarie’s Sarah Hindlian initiated coverage of Splunk with an Outperform rating and a price target of $59.

Splunk is the only easy-to-use, rapidly deployable, on premise-or cloud delivered unified big data platform, analyst Sarah Hindlian commented.

Strengths Driving Splunk’s Growth Prospects

Hindlian expects Splunk’s powerful data indexing engine to find newer applications. The engine’s overall flexibility, support for software developers and new tools should boost customer usage.

Splunk’s new all-you-can-eat pricing model is being received well by enterprise customers. The analyst believes that the company’s easy-to-use UI and vast ecosystem of partners should allow it to maintain its lead over competitors.

The recently integrated machine learning acquisitions, namely Metafor Software and Caspida, can enable anomaly detection functionality and drive new applications.

Splunk’s long-term growth is likely to be driven by mix-shift towards ratable business. Hindlian added that the shift would allow the company to smoothen out seasonality, a significant feature of the perpetual licensing model.