We assign a fundamental rating of 5 out of 10 to SPLK. SPLK was compared to 278 industry peers in the Software industry. SPLK has an average financial health and profitability rating. SPLK is not priced too expensively while it is growing strongly. Keep and eye on this one!

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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.
SPLK had a positive operating cash flow in the past year.
In the past 5 years SPLK reported 4 times negative net income.
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.
SPLK's Return On Equity of 35.62% is amongst the best of the industry. SPLK outperforms 95.71% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.74%, SPLK belongs to the top 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 has a better Operating Margin (6.34%) than 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.
SPLK has more shares outstanding than it did 1 year ago.
The number of shares outstanding for SPLK has been increased compared to 5 years ago.
The debt/assets ratio for SPLK has been reduced compared to a year ago.

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 (2.98) which is comparable to the rest of the industry.
SPLK has a debt to FCF ratio of 3.15. This is a good value and a sign of high solvency as SPLK would need 3.15 years to pay back of all of its debts.
The Debt to FCF ratio of SPLK (3.15) is better than 68.93% of its industry peers.
SPLK has a Debt/Equity ratio of 4.20. This is a high value indicating a heavy dependency on external 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

A Current Ratio of 1.62 indicates that SPLK should not have too much problems paying its short term obligations.
SPLK has a Current ratio (1.62) which 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.
The Quick ratio of SPLK (1.62) is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	1.62
Quick Ratio	1.62

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 105.68% over the past year.
SPLK shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 32.69% yearly.
The Revenue has grown by 15.38% in the past year. This is quite good.
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.
The Revenue is expected to grow by 16.00% on average over the next years. This is quite good.

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

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 28.90, SPLK can be considered very expensive at the moment.
79.64% of the companies in the same industry are more expensive than SPLK, based on the Price/Earnings ratio.
SPLK is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.30, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 27.47, SPLK can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, SPLK is valued a bit cheaper than 75.36% of the companies in the same industry.
SPLK is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.57, 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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SPLK indicates a rather cheap valuation: SPLK is cheaper than 81.79% of the companies listed in the same industry.

		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.