Bear Notes Galore for Software Stock After Earnings

No fewer than 12 analysts cut their SPLK price targets

Deputy Editor
Jun 3, 2021 at 10:43 AM
facebook twitter linkedin

The shares of Splunk Inc (NASDAQ:SPLK) are down 8.3% to trade at $113.46 at last check, after the software company reported wider-than-expected first-quarter losses per share, and revenue about in line with expectations. To follow, no fewer than 12 analysts cut their price targets, with the lowest coming from Stifel to $140. 

Today's negative price action has SPLK back below the 10-day moving average, which flipped into support late May after guiding the shares to a May 11 annual low of $110.28. Year-to-date, the equity is down 33.4%. 

Analysts are split on Splunk stock, with 14 of the 25 in coverage carrying a "buy" or better rating, and the remaining 11 at a tepid "hold." Meanwhile, the consensus 12-month price target of $169.26 is a lofty 48.9% premium to its current perch., which implies more price-target cuts could be on the way. 

Over in the options pits, traders have been looking particularly bearish. This is per SPLK's 10-day put/call volume ratio of 1.42 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 97% of readings from the past year. This shows puts being picked up at a much faster-than-usual rate. 

Today, however, there seems to have been a shift in sentiment amongst options traders. So far, 15,000 calls and 9,532 puts have crossed the tape, with overall volume running at six times the intraday average. The weekly 6/4 110-strike put is the most popular, followed by the 145-strike call in the same series. 


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!



Special Offers from Schaeffer's Trading Partners