Splunk, a provider of data analytics software, is the IBD Stock Of The Day. SPLK stock is in buy-zone territory.
Splunk's cloud-based software helps businesses search, correlate, analyze, monitor and report on data in real time. The software also can analyze vast amounts of historical information.
Using data analytics, Splunk provides businesses with useful insights. Those insights span in-depth customer research, product development, cost management and competitive analysis. The San Francisco-based company was founded 20 years ago.
Splunk is trading in the handle of a six-month cup base, the most recent after a series of failed breakouts. The stock found support at its 50-day moving average, then reversed higher in strong volume.
Splunk Stock Retakes Key Support Level
On Monday, SPLK stock retook its 21-day exponential moving average, a good entry point for aggressive investors. Shares are trading about 5% below the standard buy point at 110.05.
SPLK stock climbed 2.5% to close at 103.29 on the stock market today.
Splunk also is on the IBD SwingTrader stock list.
On March 1, Spunk reported fourth-quarter results that beat estimates on the top and bottom lines, but it offered an outlook that fell short.
Revenue of $1.25 billion beat views of $1.075 billion. Adjusted income of $2.04 a share beat estimates of $1.14. But Splunk said it expects first-quarter revenue of $710 million to $725 million, while analysts had forecast revenue of $807.2 million.
The morning after the earnings report, SPLK initially dropped 10%. It subsequently clawed back to finish the day about where it started.
SPLK Stock: Expanding Field Of Opportunities
"We've made substantial progress on our efforts to improve operating efficiency and lower our cost," Chief Executive Gary Steele said on the conference call with analysts after the earnings report. He also sees an expanding field of business opportunities coming from the current macroeconomic environment.
"The current budgetary environment can create opportunities for us as companies look to consolidate the number of tools used across their operations with proven leaders like Splunk," he said.
SPLK stock holds the No. 6 ranking among its peers in IBD's Computer Software-Database industry group. Ranking No. 1 is Alteryx, followed by Progress Software.
The IBD Stock Checkup Tool shows that SPLK stock has an IBD Composite Rating of 80 out of a best-possible 99. The rating means Splunk currently outperforms 80% of all stocks. That's in terms of the most important fundamental and technical stock-picking criteria.
Moreover, it has a Relative Strength Rating of 70 out of 99. The rating tracks market leadership by showing how a stock's price movement over the past 52 weeks measures up against that of all other stocks in IBD's database.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
