Analysts are Downgrading These 5 Stocks

4. Splunk Inc. (NASDAQ:SPLK)

Number of Hedge Fund Holders: 47

Shares of Splunk Inc. (NASDAQ:SPLK) slid over five percent in early trading on Thursday, October 6, after UBS analyst Karl Keirstead lowered his ratings for the software company from “Buy” to “Neutral.”

Referring to his recent round of industry checks, Keirstead said Splunk Inc. (NASDAQ:SPLK) is facing multiple headwinds besides macro uncertainty. He also cut his price target for the California-based company from $125 per share to $86 per share.

Meanwhile, investment management firm Vulcan Value Partners also discussed Splunk Inc. (NASDAQ:SPLK) in its second-quarter 2022 investor letter, stating:

“Splunk Inc. is a software company for managing and gaining insights from data. Despite being a material detractor during the quarter, Splunk reported better than expected revenue, margins and guidance. Revenue increased 34% and the company produced a 20% free cash flow margin. Additionally, Gary Steele started his position as the new CEO. Gary was the founder of Proofpoint and led that company for 20 years prior to selling it to Thoma Bravo for $12 billion last year.

We believe Splunk’s long-term prospects remain strong. As they have transitioned their customers to the cloud, the company is generating good free cash flow and its margins are increasing and have the potential to expand. The company has a solid competitive position, a large market, and we expect its growth to be strong and durable.”