Home Investing Activist investor takes a stake in Splunk: what’s next for this stock?

Activist investor takes a stake in Splunk: what’s next for this stock?

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Splunk Inc (NASDAQ: SPLK) is trading up this morning on a report that Starboard Value has a close to 5.0% stake in the analytics and security software company.

Expert shares her outlook on Splunk stock

The activist investor plans on pushing Splunk to take actions that would help boost its stock price. Further details are expected on Tuesday.

Sharing her outlook on the Nasdaq-listed firm after this news, Amy Raskin (Chief Investment Officer at Chevy Chase Trust) said on CNBC’s “Halftime Report”:

We like this company. It has a good technology. When we talk with companies, they like using Splunk. The cash flow is still there and still real. So, we continue to hold it. It’s not a huge position but we like the set up here.

Her constructive outlook is in line with Wall Street that also recommends investing in this stock and sees upside in it to $126 a share on average.

Splunk Inc could be a good acquisition

Earlier this year, Cisco Systems Inc wanted to buy Splunk for over $20 billion. The stock has lost about 50% since then, which, as per Raskin, could spur interest (not necessarily from Cisco) again.

It’s a nice bite-sized acquisition for somebody. About $11 billion market cap, less than four times sales. It’s not particularly expensive. It has a new CEO who’s willing to do deals and monetise the asset. So, it’s a good investment for Starboard.

Gary Steele took the helm from the former Chief Executive Doug Merritt in March of 2022.

In its latest reported quarter, Splunk Inc topped Street expectations on both top and the bottom line.

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