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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Splunk Inc. (XNAS:SPLK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SPLK
Name:
SPLUNK INC. (XNAS:SPLK)
Sector:
66.74M
Industry:
Software�Infrastructure
CEO:
Mr. Douglas Merritt
Total Employees:
7,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -115.44% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SPLUNK INC.(SPLK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
87.33
One Month Price Target:
$88.02
Six Month Price Target :
$91.47
Likely Price in One Year's Time:
Ticker:
$95.6
Likely Trading Range Today Under (Normal Volatility)
$86.8
Price Upper limit ($) :
$87.83
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$81.1
This week:
$73.41
This month :
$59.49
Other Primary facts
Market Cap:
14.15B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
162.71M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.92%
-23.25%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$116.24
$103.13
$58.42
$71.53
Medium risk (<10%) entry points
Buy Call
Sell Call
$98.86
Buy Put:
Sell Put:
$96.06
$75.77
$78.60
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SPLK
Sharpe Ratio:
-0.64%
Comparison:
SPLK, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -139.12% lower than the industry
& is -128.06% lower than the market/S&P 500 average
Average Returns/Yield of
SPLK
Daily returns:
-0.01%
Weekly returns:
-0.07%
Monthly returns:
-0.27%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is -122.21% below industry average
Classification:
SPLK, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.64
Statistical test of Returns:
SPLK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.46%
Weekly Volatility:
7.75%
Monthly Volatility:
15.49%
Yearly Volatility:
53.67%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.81%
Volatility in last five trading days has been -76.54% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.13%
Weekly VaR:
-15.94%
Monthly VaR:
-31.88%
How Much Can the price of
SPLK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$62.57
This translates to price declining to:
$13.10
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
SPLK is a 125.00% riskier investment compared to the market/S&P 500 & is 92.76% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 3.98% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SPLK
Beta in relation to market/S&P 500--1.41
Expected beta in 1 year's time:
1.156
Expected beta in 3 year's time:
1.634
Unlevered (debt free) Beta:
0.457
Beta in relation to Nasdaq (XNAS):
1.281
Beta in relation to all global stocks::
0.925
Beta Comparison & Analysis
Beta of competitors/peers::
1.277
Beta is 10.42% higher than peers
Average Industry Beta:
1.112
Beta is 26.80% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.160
Alpha is -542.26% below industry average alpha yield
Alpha is -1019% below the market average
Analysis of Cost of Capital of
SPLK
Equity cost of capital:
0.128
Equity cost of capital is 18.96% above industry mean WACC
Unlevered (without debt) cost of capital:
4.15%
Before-tax cost of debt:
1.92%
After-tax cost of debt:
1.52%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.52%
WACC is -2.29% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$17.49
Revenue growth rate per share of (3Y):
11.4
Annual revenue growth rate is -22.02% below industry average
EPS:
-$7.27
Expected Annual growth rate of EPS (3Y):
63.69%
Expected future EPS growth rate is 111.43% higher than the Software�Infrastructure industry
Free cash flow (FCF) per share:
$1.08
-
-
Debt per share
$15.70
EBITDA per share
-$6.18
Valuation Analysis Today of
SPLK
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
228.21
-
-
SPLK is -118.41% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
4.99
Price to sales ratio is -54.53% below the industry mean
P/B (Price to book value ratio):
11.4
Price to free cash flow: 80.60
-
Net income growth rate (3Y):
213.34%
Net income growth rate is -97.49% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
205.04%
Net debt to equity ratio:
56.97%
Debt to assets ratio:
48.23%
Net debt to assets ratio:
13.40%
Debt-to-asset ratio is -30.83% below industry average
Ability to repay debt:
Interest coverage ratio:
-20.48
Interest coverage ratio is -90.30% less than industry average
Looking forward:
Debt growth rate:
-2.14%
Annual debt growth is -102% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.594
Statistical significance of correlation:
SPLK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is 23.77% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
-0.018
Covariance of price movement with the market:
-0.037
Kurtosis
6.611
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.78
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SPLK
Gross Profit Margin Ratio:
290%
Operating Profit Margin Ratio:
-35.25%
Operating profit margin is 197.02% higher than the industry
Net Profit Margin Ratio:
290%
Effective Tax Rate:
-1.78%
Effective tax rate is -105.67% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-94.08%
Return on equity (ROE) is -188.13% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-22.13%
Return on assets (ROA) is 484.38% higher than the industry
Financial Leverage:
1.9x
Current Ratio:
2.16
Current ratio is -7.27% below industry average
Cash Conversion Cycle (days):
148.9
Cash conversion cycle is 32.29% above industry average
The remaining useful life of property plant & equipment is: 5.5 years
Stock based compensation to net income ratio:
-15.56%
In-depth Efficiency Analysis
Revenue generated per employee:
406.5K
Each employee generates 3% more revenue than industry average revenue per employee
EBITDA generated per employee:
- 143.7K
Each employee generates -320% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 167.5K
Each employee generates -900% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
9.5K
Each employee generates -52% less free cash flow than industry average revenue per employee
Assets/Capital per employee
325.7K
Each employee generates -52% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 27.63%
Growth rate in R&D investment/expenditure is -1165.38% lower than the industry
Competitors/Peer firms of
SPLK
NICE LTD (XNAS:NICE)
AKAMAI TECHNOLOGIES, INC. (XNAS:AKAM)
ENTEGRIS, INC. (XNAS:ENTG)
NUANCE COMMUNICATIONS, INC. (XNAS:NUAN)
QORVO, INC. (XNAS:QRVO)
SABRP
ENPHASE ENERGY, INC. (XNAS:ENPH)
QUALTRICS INTERNATIONAL INC. (XNAS:XM)
TRIMBLE INC. (XNAS:TRMB)
Current Analyst Ratings
Strong buy�46%
Buy�92%
Hold�42%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
2.85B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
764.22M
2.08B
1.04B
472.87M
2.05B
1.57B
-
3.08B
3.58M
49.13M
96.95M
- 1005891.00K
- 1003169.00K
- 1172418.00K
- 1151970.00K
20.45M
- 1172418.00K
Statement of Cash Flow
Date:
Period:
25.80M
Differed Income Tax :
- 1129.00K
Stock Based Compensation :
182.42M
Change in Working Capital :
211.00M
Accounts Receivables:
494.35M
Other Working Capital:
- 214442.00K
Other Non-Cash Items:
123.58M
Net Cash Provided by Operating Activities:
70.66M
Investments in PP&E:
- 853.00K
Net Acquisitions:
-
Purchases of Investments:
- 20221.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
1.85B
20.20M
1.87B
775.94M
-
376.86M
3.02B
384.71M
1.33B
191.31M
13.60M
-
355.15M
2.28B
-
5.30B
48.85M
-
-
923.91M
425.39M
1.40B
2.56B
12.08M
2.65B
-
4.05B
164.00K
- 2940452.00K
- 748.0K
4.19B
April 30, 2021 at 6:00:00 AM
3.85B
1.25B
5.30B
33.80M
2.56B
710.0M
87.77M
- 2941.00K
63.75M
-
-
-
-
- 60277.00K
- 60277.00K
-
74.13M
1.85B
1.77B
70.66M
- 3919.00K
66.74M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
SPLK
2023
2024
2025
2026
2027
$95.90
$104.98
$114.93
$125.82
$137.74