SPLK Stock Forecast: Machine Data Player Is Set to Post More Double-Digit Returns

SPLK stock
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SPLK Stock to Gain More From IoT Focus

The amount of data in the world is exploding, and organizations need tools that enable them to make the most of their data in order to improve their operations.

There are many companies in the market today that help their clients achieve this objective, but one of them particularly stands out. In a short period, this company has won many top-notch clients and has increased its revenue phenomenally.

Splunk Inc (NASDAQ:SPLK), a leading software provider, offers a platform that uses machine data to help its customers gain real-time intelligence about their operations.

Machine data is one of the fastest growing segments of “Big Data.” Machine data can be produced by nearly every software application and electronic device that an organization uses, including web sites, networks, and mobile devices.

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Splunk is a dominant player in this field, which has helped SPLK stock post above-average returns.

With the help of Splunk’s platform, organizations can ask questions, get answers, and take actions. The company’s solutions use machine learning to keep track of all forms of data, including data that comes from Internet of Things (IoT).

By using this asset properly, an organization can identify where things have gone wrong, learn how to enhance customer experience, and gather evidence of fraud.

By monitoring and analyzing activities like financial transactions, customer/user interactions, and security threats, Splunk’s platform turns machine data into valuable insights.

And there’s another exciting opportunity on the radar: the rise of the Industrial Internet of Things (IIoT). It involves things like industrial control systems, sensors, manufacturing systems, and smart meters.

As per Splunk’s management, the market for its products is large and growing. By 2020, data production will be 44 times greater than it was in 2009. Moreover, the number of devices connected to IP networks will be more than three times the global population by 2021.

Splunk is well positioned to gain from this rising trend. It recently released its first IoT product, “Splunk for Industrial IoT.” Customer feedback has been overwhelmingly positive for the software, which helps industrial companies to minimize downtime and save money.

Splunk is in a good position to continue to lead in the data revolution, and its recent financial results prove this.

The company recently announced its third-quarter results. Software revenue was $325.0 million, an increase of 49% year-over-year. Total revenue was $481.0 million, an increase of 40% year-over-year. (Source: “Splunk Inc. Announces Fiscal Third Quarter 2019 Financial Results,” Splunk Inc, November 29, 2018.)

Doug Merritt, the CEO of Splunk, said that the demand for “data-driven insights” has been rising in all industries.

The company signed more than 500 new enterprise customers in the quarter. A few of the company’s clients are ATB Financial (Canada), Softbank Group Corp (Japan), SundaySky (Israel), and Randstad NV (Netherlands),.

Furthermore, the company was ranked as number nine in the Forbes “Top 100 Digital Companies” list.

The SPLK stock price has gone up by about 35% over the past year. It has gained more than 85% since August 2017, when we previously covered Splunk stock in Profit Confidential.

Splunk-Stock-Graph-Chart

Chart courtesy of StockCharts.com

Analyst Take

Splunk Inc is focused on making machine data accessible, usable, and valuable to organizations. The company’s offerings enable users to collect, explore, monitor and analyze data—regardless of format or source.

Even though Splunk has a long way to go in its data and analytics journey, it is in a great position to lead in this huge and growing market.

Given the strong tailwinds for the business, SPLK stock could continue to scale new heights. Investors might want to consider Splunk stock for the long term.