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Can Healthy Revenue Growth Aid Splunk's (SPLK) Q2 Earnings?

Splunk Inc. SPLK is scheduled to report second-quarter fiscal 2023 results on Aug 24, after the market closes. In the last reported quarter, the company delivered an earnings surprise of a negative 55.6%. It pulled off a trailing four-quarter earnings surprise of 135.8%, on average.

The San Francisco, CA-based software solutions company is expected to have recorded year-over-year higher revenues due to healthy demand trends.

Factors at Play

In the second quarter fiscal, the company announced that Nubank, one of the largest digital financial services companies, will be using Splunk Cloud Platform to help support nearly 60 million digital banking customers in Latin America. The partnership with Nubank will securely enable and optimize its business to deliver exceptional customer experience and empower millions to take control of financial matters. The consensus estimate for total revenues from License stands at $211 million, which implies a decrease from $220 million reported a year ago.

In the second quarter fiscal, the company announced the next generation of the Splunk Platform. This will comprise new enhancements to the Splunk Cloud Platform. The general availability of Splunk Enterprise 9.0 will empower customers to make business decisions on full fidelity data and act faster on data insights. It will be able to customize how those insights are operationalized across the hybrid cloud. The consensus estimate for total revenues from Maintenance and Services stands at $171 million, which implies an increase from $169 million reported a year ago.

For the July quarter, the Zacks Consensus Estimate for total revenues is pegged at $748 million, which indicates growth of 23.4% from the year-ago quarter’s reported figure. The consensus estimate for adjusted loss per share stands at 37 cents, suggesting an improvement of 40.3% year over year.

 

Splunk Inc. Price and EPS Surprise

Splunk Inc. Price and EPS Surprise
Splunk Inc. Price and EPS Surprise

Splunk Inc. price-eps-surprise | Splunk Inc. Quote

What Our Model Says

Our proven model does not predict an earnings beat for SPLK this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Splunk’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at 0.00% with both pegged at a loss of 37 cents.

Zacks Rank: It currently carries a Zacks Rank #3.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post earnings beat this quarter:

Chewy, Inc CHWY is slated to release second-quarter 2022 results on Aug 30. Chewy has an Earnings ESP of +1.03% and a Zacks Rank #1. In the last reported quarter, the company delivered an earnings surprise of +133.3%. It pulled off a trailing four-quarter earnings surprise of 4.05%, on average. It engages in pure play-ecommerce business in the United States. It offers approximately 100,000 products from 3,000 partner brands.

Intuit Inc. INTU has an Earnings ESP of +1.92% and Zacks Rank #2. Intuit is set to report fourth-quarter and full-year fiscal 2022 results on Aug 23. In the last reported quarter, the company delivered an earnings surprise of 0.7%. It pulled off a trailing four-quarter earnings surprise of 16.8%, on average. The company carries out its operations by providing financial management and compliance products and services for consumers, small businesses, self-employed and accounting professionals in the United States, Canada and the rest of the world.

Ultra Beauty, Inc. ULTA is scheduled to release second-quarter 2022 results on Aug 25. Ultra Beauty has an Earnings ESP of +2.37% and a Zacks Rank #2. In the last reported quarter, the company delivered an earnings surprise of 41.9%. It pulled off a trailing four-quarter earnings surprise of 50%, on average.

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Intuit Inc. (INTU) : Free Stock Analysis Report
 
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