Why did Splunk's actions fall on Friday?

What happened

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Actions of Splunk Inc. (NASDAQ: SPLK) fell 7.3% Friday despite the company Announces Strong First Quarter Financial ResultsAnalysts focused on the software company's weak cash flow forecast and slowing customer gains. "data-reactid =" 12 "> Shares of Splunk Inc. (NASDAQ: SPLK) tumbled 7.3% on Friday despite strong first quarter results, while analysts focused on the software company's weak cash flow forecast and slowing customer gains.

So what

After the markets closed Thursday night, Splunk, a data analysis software company, announced adjusted net income of $ 0.02 per share for a $ 425 million turnover, outpacing by far the consensus of analysts for a loss of $ 0.14 per share on a business turnover of $ 395 million. The company also raised its full-year revenue guidance from US $ 2.2 billion to US $ 2.25 billion, which suggests an increase in consensus estimates of 2.22 billion US dollars. billions of dollars.

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Source of the image: Getty Images.

The company exceeded most of the quarter's indicators, but a number of analysts have presented the results in a very vague light. After making a profit, BMO Capital analyst Keith Bachman lowered his price target from $ 157 to $ 157 due to "uncertainty" about Splunk's growth rates and cash flow penetration available, although valuation remains attractive.

Similarly, Guggenheim analyst Imtiaz Koujalgi lowered his price target from $ 125 to $ 115, saying that cash flow from operations could be a barrier for the entire economy. ;year. And Alex J. Zukin of Piper Jaffray said the company had "significantly" reduced its cash flow forecast from $ 350 million to $ 250 million, and that management had expressed disappointment with the company. number of new customers added during the quarter.

Now what

The quarter may not have been perfect, but as Bachman notes, there is still a lot to like about performance. Prior to the release of the results, Splunk's shares had increased by 30% since the beginning of the year and had more than doubled in the last three years.

The company is still moving in the right direction, but although the index has shown that Splunk's momentum may be slowing a bit, investors said Friday it was better to book gains.

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Lou Whiteman has no position in any of the actions mentioned. The Motley Fool owns shares and recommends Splunk. The Motley Fool has a disclosure policy."data-reactid =" 40 ">Lou Whiteman has no position in any of the actions mentioned. The Motley Fool owns shares and recommends Splunk. Motley Fool has a disclosure policy.