![]() It's also the largest company in the space. Splunk isn't without competitors, but the company's focus on machine data is unique. As data volumes continue to explode and companies push the boundaries of how they integrate data into operations and decision-making, Splunk has a tremendous opportunity to derive growth from within its install base. Splunk's platform is charged on a data volumes/computing power basis. Usage-based pricing - Some of the most successful software stocks are usage-based, meaning that revenue climbs proportionally to a customer's usage of the product. ![]() But as Splunk has evolved, the company's machine data capabilities are applicable across virtually any industry and across many functions. The use cases for Splunk are infinite - In its early days, Splunk's machine data-mining capabilities were often used for security purposes to flag and respond to anomalies within corporate systems. Here's a full rundown on what I think to be the key bullish drivers for Splunk: This is a fantastic company that now has a powerful ARR base, a best-in-class technology that is widely regarded in the industry, and on track to becoming immensely profitable thanks to its rich gross margin profile and opportunities for operating leverage. Year to date, shares of Splunk are down ~30% - more modest than most tech peers, but still not in line with the vast fundamental wins the company has scored recently, most notably in largely completing its transition to a subscription-based business model. This machine-data platform is one of the most prominent names in big data analytics, and its technology is a mission-critical tool that helps businesses derive insights from data already generated from their internal systems. Splunk ( NASDAQ: SPLK) is one company that bears special mention. The mid-cap tech space, in particular, has plenty of fundamental powerhouses that are trading at fire-sale levels, and investors with cash to deploy can benefit from truly unmissable entry points. As the market retreats deeper and deeper into correction mode, it is an excellent time for brave investors to make long-term plays in fantastic companies that have fallen out of fashion.
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