![]() It's a fast-growing business given the size and unwieldiness of the customers it targets, and it is likely to have very long lived subscription/maintenance fees because once that stuff is installed in customer environments we doubt anyone is going to be unplugging it any time soon. PLTR has a quasi-religious aspect to the business, both among its retail shareholder fanbois (some will appear in this article comments no doubt) and its management team and board members. The nature of the beast when selling to very large customers like this is that you have to customize your products a lot, to fit the customer environment, which is why you see PLTR reporting a hundred different use cases not just the same old same old as is the case for niche plays with a simple function set. Palantir ( NYSE: PLTR) is an application software business producing, at their core, analytics apps used by high-end government departments or demanding enterprise users to obtain insights from the data analysis intellectual property that PLTR has sought to productize. So ignoring the time value of money, and the psychological value of chalking up a tech stock win or two to try to re-introduce your brain to the oxytocin shots it has been lacking in this regard since November 2021, you'd choose PLTR alone. In short: we think both can be bought with solid expectations of upside we think there is less upside in Splunk than in Palantir, and probably about the same level of downside. ![]() Our answer depends on your timeframe and risk appetite. But let's say you are sitting there with a fistful of dollars thinking, ooh, growth stocks all stomped on, market looks like it might be turning up, kid-in-candy-store time, which one shall I buy? The question is a false one of course, because you could just do what we've done in staff personal accounts and own them both. Choose Your Time frame, Choose Your Stock values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. ![]() Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. JMP points out that an increasing number of Splunk’s customers are adopting the company’s infrastructure-based pricing, which shows that the new pricing model is working.Īt recent prices, Splunk shares trade at 13 times the FY’21 (ending January) consensus revenue estimate of $2.43 billion and 10.4 times the FY’22 consensus of $3.05 billion.DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Strength in cloud adoption implies that the company is executing better than competitors have suggested, says the firm. JMP Securities remains positive on Splunk, pointing to the rising cloud bookings mix. In late June, Goldman raised its Splunk target to $254 from $203. Goldman Sachs says the criticality of many software categories has become evident during the Covid-19 crisis, as business customers have been forced to modernize their cloud systems and adjust their operations for more remote workforces. Rosenblatt recently increased its target to $250 from $200, saying it sees Splunk software getting prioritized as organizations accelerate the migration of workloads to the cloud.īarclays lifted its Splunk price target to $245 from $195, calling out the pandemic as a key demand driver for digital transformations. ![]() Splunk is expanding into core markets that are larger than investors appreciate and has made considerable progress in recent years in building out the product portfolio, says the firm. In early July, Morgan Stanley boosted its price target to $246 from $172 because it has growing conviction that Splunk’s outlook for near-term ARR growth is achievable. Morgan Stanley believes it’s increasingly likely that CIOs will look to consolidate capabilities and standardize on a smaller number of software platforms amid pressure on IT budgets, with Splunk emerging as one of the key consolidators.
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