Investing

Earnings Previews: Pure Storage, Salesforce, Snowflake, Splunk

Snowflake

Another big data company, Snowflake Inc. (NYSE: SNOW), came public in September of 2020 and the shares popped to a gain of more than 50% in early December. Shares came back to earth in January. Since the IPO, Snowflake stock is up about 11%, as of Tuesday morning. Cathie Wood’s ARK  Next Generation Internet ETF holds a mere 98 shares of Snowflake stock, unchanged since the end of the March quarter.

Analyst sentiment on the stock is mixed, with 14 of 29 rating the stock a Buy or Strong Buy and another 14 having Hold ratings. At a price of around $283.40, the implied gain based on a median price target of $290 is 2.3%. At the high target of $515, the upside potential is 82%.

For the second quarter of fiscal 2022, analysts are forecasting revenue of $256.74 million, which would be 12.2% higher sequentially. The forecast loss per share is $0.15, worse than the $0.11 loss in the first quarter. For the full fiscal year, current estimates call for a loss per share of $0.58, compared to a loss last year of $1.55. Revenue is forecast to rise more than 88% to $1.12 billion.

Snowflake is not expected to post a profit in 2022, 2023 or 2024. The stock trades at 66.4 times its 2022 enterprise value-to-sales multiple, 40.5 times the 2023 multiple and 25.9 times the 2024 multiple. The stock’s 52-week range is $184.71 to $429.00, and Snowflake does not pay a dividend.

Splunk

Data analytics and security software maker Splunk Inc. (NASDAQ: SPLK) has had a tough past 12 months. The stock is down nearly 28% over that period and down about half that much in 2021 alone. Splunk’s good news is that, since early June, shares are up about 31%. Like Snowflake, the company’s stock is included in ARK Invest’s next-gen internet ETF, but the fund continues to hold 399,139 shares of Splunk stock worth about $57.6 million. That’s slightly less than the 429,357 held on June 30.

Analyst sentiment is somewhat bullish on the stock. Of 37 firms covering the stock, 23 rate it a Buy or Strong Buy, while 14 rate the shares a Hold. At a price of around $146.90, the upside potential based on a median price target of $164 is 11.6%. At the high price target of $225, the implied upside is more than 53%.

Splunk is expected to report second-quarter 2022 revenue of $563.27 million, up by 12.2% sequentially and by about 14.6% year over year. Analysts expect a loss per share of $0.69, an improvement over the first-quarter loss of $0.91 per share. For the full fiscal year, Splunk is expected to post a loss per share of $1.46, worse than the 2020 loss of $0.55. Revenue is forecast to rise by 13.7% to $2.54 billion.

The company is not expected to post a profit until fiscal 2024. At the current price, the stock trades at a multiple of 96.3 to the estimated 2024 EPS of $1.50. The stock’s 52-week range is $110.28 to $225.89, and Splunk does not pay a dividend.

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