Starboard Value has taken a slightly under 5% stake in software company Splunk (NASDAQ:SLPK), the Wall Street Journal reported. The report highlighted that the activist investor could push SPLK’s management to take measures to drive its stock price higher. Notably, Splunk stock has declined more than 39% year-to-date.
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Splunk Faces Headwinds
SPLK stock could get a boost from Starboard’s stake. However, macro challenges and uncertainty pose challenges. Furthermore, competitive headwinds remain a drag.
Mizuho Securities analyst Gregg Moskowitz sees competition and execution challenges for SPLK stock. Moskowitz stated, “We believe SPLK is a depressed stock, although we also continue to believe the company faces significant competitive challenges and remain concerned about whether it can consistently execute.”
Earlier, during the Q2 conference call, SPLK’s management lowered its full-year ARR (annual recurring revenue) guidance. The company expects to deliver an ARR of $3.65 billion in Fiscal 2023, down from $3.9 billion.
Is SPLK a Buy or Sell?
Given the uncertainty, analysts are cautiously optimistic about SPLK stock. It has a Moderate Buy consensus rating on TipRanks based on 19 Buy and 10 Hold recommendations. Meanwhile, analysts’ average price target of $127.44 implies a significant 81.5% upside potential.
While analysts are cautiously optimistic, news and blogger sentiments are positive about Splunk stock. Meanwhile, hedge funds acquired 2.9K SPLK stock last quarter. Overall, SPLK stock has an Outperform Smart Score of eight out of 10.
