Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Splunk Inc (SPLK): Stay Away From This Technology Stock

Bottom line

It is easy to grow when you are small. As you get bigger, things become increasingly difficult. For example,’s trailing revenue for the last twelve months was $3.25 billion. The company has delivered a 28% first quarter revenue growth in comparison with the previous year. Splunk’s revenue is not projected to exceed 300 million in the coming year. However, given the current valuation, Splunk would have to grow its revenue for several billion dollars. I think it would be difficult to do this fast. The market has grown slower than 5%. The economic situation is still fragile, and businesses are cautious about their costs. I think that Splunk is overvalued, and the stock would be punished when the investors realize that growth is not as big as they expected.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool recommends

The article Stay Away From This Technology Stock originally appeared on and is written by Vladimir Zernov.

Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.