As of April 4, 2026, Splunk Inc has a Discounted Cash Flow (DCF) derived fair value of $55.72 per share. With the current market price at $156.90, this represents a potential upside of -64.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $25.28 |
| DCF Fair Value (10-year) | $55.72 |
| Potential Upside (5-year) | -83.9% |
| Potential Upside (10-year) | -64.5% |
| Discount Rate (WACC) | 6.8% - 9.2% |
Revenue is projected to grow from $4216 million in 01-2024 to $10534 million by 01-2034, representing a compound annual growth rate of approximately 9.6%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 01-2024 | 4216 | 15% |
| 01-2025 | 4445 | 5% |
| 01-2026 | 4955 | 11% |
| 01-2027 | 5528 | 12% |
| 01-2028 | 6060 | 10% |
| 01-2029 | 6715 | 11% |
| 01-2030 | 7569 | 13% |
| 01-2031 | 8339 | 10% |
| 01-2032 | 8995 | 8% |
| 01-2033 | 9819 | 9% |
| 01-2034 | 10534 | 7% |
Net profit margin is expected to improve from 6% in 01-2024 to 12% by 01-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 01-2024 | 264 | 6% |
| 01-2025 | 353 | 8% |
| 01-2026 | 440 | 9% |
| 01-2027 | 541 | 10% |
| 01-2028 | 645 | 11% |
| 01-2029 | 769 | 11% |
| 01-2030 | 878 | 12% |
| 01-2031 | 980 | 12% |
| 01-2032 | 1071 | 12% |
| 01-2033 | 1184 | 12% |
| 01-2034 | 1286 | 12% |
with a 5-year average of $44 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 01-2025 | 39 |
| 01-2026 | 45 |
| 01-2027 | 60 |
| 01-2028 | 77 |
| 01-2029 | 95 |
| 01-2030 | 106 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 165 |
| Days Inventory | 0 |
| Days Payables | 17 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2025 | 333 | 5 | 77 | 163 | 88 |
| 2026 | 421 | 7 | 85 | 177 | 152 |
| 2027 | 530 | 8 | 95 | 262 | 165 |
| 2028 | 644 | 10 | 104 | 246 | 283 |
| 2029 | 779 | 12 | 116 | 275 | 377 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 25.28 | -83.9% |
| 10-Year DCF (Growth) | 55.72 | -64.5% |
| 5-Year DCF (EBITDA) | 31.16 | -80.1% |
| 10-Year DCF (EBITDA) | 49.67 | -68.3% |
Is Splunk Inc (SPLK) a buy or a sell? Splunk Inc is definitely a sell. Based on our DCF analysis, Splunk Inc (SPLK) appears to be overvalued with upside potential of -64.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $156.90.