We assign a fundamental rating of 5 out of 10 to SPLK. SPLK was compared to 277 industry peers in the Software industry. Both the profitability and the financial health of SPLK get a neutral evaluation. Nothing too spectacular is happening here. SPLK is not overvalued while it is showing excellent growth. This is an interesting combination.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year SPLK was profitable.
In the past year SPLK had a positive cash flow from operations.
SPLK had negative earnings in 4 of the past 5 years.
In multiple years SPLK reported negative operating cash flow during the last 5 years.

1.2 Ratios

SPLK has a Return On Assets of 3.94%. This is in the better half of the industry: SPLK outperforms 79.64% of its industry peers.
The Return On Equity of SPLK (35.62%) is better than 95.71% of its industry peers.
With an excellent Return On Invested Capital value of 5.74%, SPLK belongs to the best of the industry, outperforming 81.79% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	3.94%
ROE	35.62%
ROIC	5.74%

ROA(3y)-7.85%

ROA(5y)-9.04%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

The Profit Margin of SPLK (6.26%) is better than 79.29% of its industry peers.
SPLK's Operating Margin of 6.34% is fine compared to the rest of the industry. SPLK outperforms 76.07% of its industry peers.
SPLK has a better Gross Margin (79.80%) than 81.79% of its industry peers.
In the last couple of years the Gross Margin of SPLK has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	6.34%
PM (TTM)	6.26%
GM	79.8%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y1.87%

GM growth 5Y-0.28%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

SPLK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for SPLK has been increased compared to 1 year ago.
SPLK has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SPLK has an improved debt to assets ratio.

2.2 Solvency

An Altman-Z score of 2.98 indicates that SPLK is not a great score, but indicates only limited risk for bankruptcy at the moment.
SPLK has a Altman-Z score of 2.98. This is comparable to the rest of the industry: SPLK outperforms 57.14% of its industry peers.
The Debt to FCF ratio of SPLK is 3.15, which is a good value as it means it would take SPLK, 3.15 years of fcf income to pay off all of its debts.
SPLK's Debt to FCF ratio of 3.15 is fine compared to the rest of the industry. SPLK outperforms 68.93% of its industry peers.
A Debt/Equity ratio of 4.20 is on the high side and indicates that SPLK has dependencies on debt financing.
The Debt to Equity ratio of SPLK (4.20) is worse than 85.71% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	4.2
Debt/FCF	3.15
Altman-Z	2.98

ROIC/WACC0.62

WACC9.33%

2.3 Liquidity

SPLK has a Current Ratio of 1.62. This is a normal value and indicates that SPLK is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of SPLK (1.62) is comparable to the rest of the industry.
A Quick Ratio of 1.62 indicates that SPLK should not have too much problems paying its short term obligations.
SPLK has a Quick ratio of 1.62. This is comparable to the rest of the industry: SPLK outperforms 50.36% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.62
Quick Ratio	1.62

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

SPLK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 105.68%, which is quite impressive.
Measured over the past years, SPLK shows a very strong growth in Earnings Per Share. The EPS has been growing by 32.69% on average per year.
Looking at the last year, SPLK shows a quite strong growth in Revenue. The Revenue has grown by 15.38% in the last year.
SPLK shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 18.51% yearly.

EPS 1Y (TTM)105.68%

EPS 3YN/A

EPS 5Y32.69%

EPS Q2Q%48.04%

Revenue 1Y (TTM)15.38%

Revenue growth 3Y23.66%

Revenue growth 5Y18.51%

Sales Q2Q%18.79%

3.2 Future

The Earnings Per Share is expected to grow by 16.06% on average over the next years. This is quite good.
Based on estimates for the next years, SPLK will show a quite strong growth in Revenue. The Revenue will grow by 16.00% on average per year.

EPS Next Y5.2%

EPS Next 2Y12.36%

EPS Next 3Y23.71%

EPS Next 5Y16.06%

Revenue Next Year15.29%

Revenue Next 2Y14.66%

Revenue Next 3Y14%

Revenue Next 5Y16%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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4. Valuation

4.1 Price/Earnings Ratio

SPLK is valuated quite expensively with a Price/Earnings ratio of 28.90.
Based on the Price/Earnings ratio, SPLK is valued a bit cheaper than 79.64% of the companies in the same industry.
When comparing the Price/Earnings ratio of SPLK to the average of the S&P500 Index (27.21), we can say SPLK is valued inline with the index average.
The Price/Forward Earnings ratio is 27.47, which means the current valuation is very expensive for SPLK.
75.36% of the companies in the same industry are more expensive than SPLK, based on the Price/Forward Earnings ratio.
SPLK is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	28.9
Fwd PE	27.47

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SPLK is valued a bit cheaper than the industry average as 66.07% of the companies are valued more expensively.
81.79% of the companies in the same industry are more expensive than SPLK, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	26.82
EV/EBITDA	76.39

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SPLK's earnings are expected to grow with 23.71% in the coming years. This may justify a more expensive valuation.