![]() Investors truly want to see resilient cloud migration being the central part of Splunk's story. And they will pace their migration when they are ready to make that move. They know they're going there, but they will pace their migration. ![]() And so I think what's happening is customers definitely see the value of cloud. We did not see, however, we didn't see any less loyalty to renewal. and it was very consistent through Q4 where we saw the same behavior on buying. So as we indicated last quarter, we did see because of macro conditions, we saw some cloud migrations and expansions move out. To contextualize my comments, consider what CEO Steele said, Is this or isn't this a high-growth company? Because despite a small upwards revision in Q4 revenues, growing at 19% y/y isn't so attractive. Revenue Growth Rates Revised Upwards a NudgeĪs you can see here, Splunk's guidance for Q4 should leave investors a little skeptical. ![]() That's not commensurate with a narrative that investors want to see. What you see above, is cloud bookings were the lowest now in all quarters in fiscal 2023. What investors want to see from Splunk is a tangible narrative about customers' readily adopting its cloud business. By this time, we would expect to see some progress in Splunk. Gary Steele has been Splunk's CEO for several months now. But the problem, I believe, is that Splunk's cloud story is struggling for traction. And now, with a new CEO at its helm for a few months, Splunk is rapidly gaining traction on its profitability profile.īy my estimates, Splunk is priced at 26x free cash flow. Splunk ( NASDAQ: SPLK) has seen its share price go nowhere fast in 5 years.
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