SPLK Takes Nosedive After Dismal Quarterly Report

No fewer then 12 analysts trimmed their price targets

Deputy Editor
Dec 3, 2020 at 10:16 AM
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The shares of software firm Splunk Inc (NASDAQ:SPLK) are taking a nosedive today. The stock was last seen down 22.4% at $159.89, after the company shared third-quarter revenue and a fourth-quarter forecast that missed estimates. In response, no fewer than 12 analysts trimmed their price targets, including D.A. Davidson, which cut to $117, and downgraded the equity to "neutral" from "buy."

As a result, SPLK is on course for its worst daily percentage loss ever, and is trading back near its late-May levels. The equity has been quite volatile on the charts since its all-time high of $225.89, touched back in early September. The security cooled considerably following this peak, though support from the 160-day moving average helped launch SPLK briefly back up the charts. This trendline has continued to serve as support for the security, though it's been breached today for the first time in roughly seven months. 

A look at analyst sentiment, coming into today, shows a healthy amount of optimism. Of the 26 analysts in coverage, 21 considered SPLK to be a "buy" or better. Plus, the 12-month consensus price target of $209.22 is a 33.9% premium to current levels. 

Options activity is also seeing a surge today on both sides, with 14,000 calls and 11,000 puts across the tape so far -- a whopping 44 times the intraday average, with volume running in the top percentile of its annual range. The weekly 12/4 150-strike put is the most popular, with positions being bought to open here, suggesting these traders are expecting the $150 level to hold as a ceiling by the time these contracts expire this Friday. 

 

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