On Thursday February 15th, Splunk’s (SPLK-NASDAQ) share price closed at $96.35. With the Thursday close surpassing our target of $93, we recommend investors no longer purchase SPLK shares. SPLK is not a FAANG play – Recall we launched our BUY recommendation on December 29th with the share price at $82.84. Our valuation is based on a fiscal Q1 2019 trailing 12-month free cash flow target. With the equity markets continuing to surge, our target was reached weeks before the company’s March 1st fiscal Q4 2018 earnings release. In comparison to other large cap tech stocks however, SPLK has a below average r-squared […]
Quotas Estimating Sales
3 posts
Stalking Splunk’s sales force – As Splunk’s full-year revenue guidance has historically been materially different from results, we decided to track approximately 800 of Splunk’s quota carrying sales force, including estimated quotas from current and potential future sales managers as per job postings. Sales force quotas are key to forecasting accurate free cash flow – Estimating revenue per quota carrying sales person is key to determining future billings, operating leverage and free cash flow growth. The stock price primarily follows a trailing 12-month free cash flow yield. Using this metric makes sense to us as it does not punish Splunk or other Big Data […]
This is the first in an ongoing series of research pieces examining Paycom (PAYC-NYSE) business and share price. We believe both an absolute and peer enterprise SaaS valuation in relation to Paycom’s growth is the best way to determine whether the stock is a buy or sell. Paycom is an enterprise SaaS company primarily offering payroll software services. It is seeing revenue growth similar to a newer SaaS company, but has revenue churn and profitability closer to more established companies. We also believe tracking the timing of the ramp up of its sales offices and sales teams is important to identifying when […]