After attending the recent Splunk Inc SPLK 0.25% Investor Day event, William Blair analyst Bhavan Suri isn’t concerned about the company’s light fiscal 2018 revenue growth guidance. According to Suri, Splunk’s initial guidance suggests 26 percent revenue growth in 2018, slightly below consensus Street estimates of 28 percent.

“The shortfall was not attributed to a large uptick in ratable mix, as some investors anticipated (ratable mix is expected to be roughly 50% versus 47% in fiscal 2017), but rather management’s view that enabling the salesforce to make the transition to primarily selling subscription contracts could cause some disruption during the year,” Suri explains.

Suri believes the new guidance is solid and wisely conservative.

In addition to revenue guidance, Splunk reiterated its prior projections of 1-2 percent annual operating margin growth over the next three years, suggesting 7-8 percent operating margins in fiscal 2018.

Perhaps most importantly, Splunk revealed 2020 targets of $2 billion in revenue and operating margins of 12-14 percent.

“On balance, we view…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!