Vulcan Value Partners: “Splunk (SPLK)’s Long-Term Prospects Remain Strong”

Vulcan Value Partners, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. All five of the fund’s strategies trailed their respective benchmarks during the quarter. The good news is that across its portfolios most of its companies are performing well fundamentally. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Vulcan Value Partners mentioned Splunk Inc. (NASDAQ:SPLK) and explained its insights for the company. Founded in 2003, Splunk Inc. (NASDAQ:SPLK) is a San Francisco, California-based software company with a $15.1 billion market capitalization. Splunk Inc. (NASDAQ:SPLK) delivered a -18.41% return since the beginning of the year, while its 12-month returns are down by -39.11%. The stock closed at $94.42 per share on August 26, 2022.

Here is what Vulcan Value Partners has to say about Splunk Inc. (NASDAQ:SPLK) in its Q2 2022 investor letter:

“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.”

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Our calculations show that Splunk Inc. (NASDAQ:SPLK) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Splunk Inc. (NASDAQ:SPLK) was in 47 hedge fund portfolios at the end of the second quarter of 2022, compared to 42 funds in the previous quarter. Splunk Inc. (NASDAQ:SPLK) delivered a -12.98% return in the past 3 months.

In June 2022, we also shared another hedge fund’s views on Splunk Inc. (NASDAQ:SPLK) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.