Investing

Earnings Previews: Coupang, Snowflake, Splunk

Analyst sentiment on Snowflake is positive, if not strongly favorable. Of 29 brokerages covering the stock, eight rate the shares at Hold and 21 have a Buy or Strong Buy rating. At a share price of around $265.70, the upside potential based on a median price target of $385 is 44.9%. At the high price target of $575, the upside potential is 116%.

Fiscal fourth-quarter revenue is forecast at $372.87 million, up 11.5% sequentially and nearly 96% year over year. Snowflake is expected to post adjusted earnings per share (EPS) of $0.03 in the quarter, down 16.7% (one penny) sequentially, but much better than the loss of $0.16 per share a year ago. For the full year that ended in January, Snowflake is expected to post a loss of $0.08, much better than last year’s loss per share of $1.55, on sales of $1.21 billion, up nearly 104%.

Snowflake’s sales to enterprise value multiple for the 2022 fiscal year is 63.3. For the 2023 fiscal year, the multiple to estimated sales of $2.01 billion is 38.1 and for 2024 it is 24.3 times estimated sales of $3.58 billion. The stock’s 52-week range is $184.71 to $405.00. CrowdStrike does not pay a dividend. Total shareholder return for the past year is negative 2.4%.

Splunk

Over the past 12 months, shares of real-time data collection and reporting platform Splunk Inc. (NASDAQ: SPLK) have dropped about 18%. The stock got a jolt of about 16% earlier this month on reports that Cisco had offered to acquire Splunk for $20 billion in cash. The offer, if it was indeed made, was rejected. Management turnover, pricing issues and shifting demands from the company’s traditional markets were cited as headwinds last week when JMP Securities downgraded the stock to Market Perform.

Analysts are bullish on the stock, with 26 of 40 giving Splunk a Buy or Strong Buy rating and the rest rating the shares at Hold. At a share price of around $116.70, the upside potential based on a median price target of $155 is 32.8%. At the high price target of $225, the upside potential is 92.8%.

For the fourth quarter of fiscal 2022 that ended in January, Splunk is expected to post revenue of $776.38 million, up 16.8% sequentially and 4.2% higher year over year. The estimated adjusted loss per share is $0.20, better than the prior quarter’s loss of $0.37 but sharply below the year-ago EPS of $0.38. For the full fiscal year, Splunk is expected to report a loss per share of $2.08, compared to last year’s loss of $0.55 per share, on sales of $2.56 billion, up 14.8%.

Splunk’s sales to enterprise value multiple for the 2022 fiscal year is 7.9. For the 2023 fiscal year, the multiple to estimated sales of $3.03 billion is 6.7, and for 2024, the multiple is 5.5 times estimated sales of $4.47 billion. The stock’s 52-week range is $105.45 to $176.66. Splunk does not pay a dividend. Total shareholder return for the past year is a negative 22.4%.

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