Splunk jumps 9% as Credit Suisse calls it a 'unique asset,' M&A reports swirl
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With Cisco (NASDAQ:CSCO) reportedly looking into acquiring Splunk (NASDAQ:SPLK), Credit Suisse said the analytics company is a "unique asset" for a number of reasons "that are consistent with some of the most-iconic companies in the history of the software industry."
Analyst Phil Winslow, who has an outperform rating and a $225 price target on Splunk, noted the company has a strong technology profile, as well as exceptional revenue metrics, both on a scale and growth profile, that could make Cisco interested in buying the firm.
Winslow added that if a deal were to happen, a "warranted price of ~$175 (or more than $30 billion)" would make sense, given Splunk's normalized long-term revenue and its revenue growth rate of 30%.
Cisco shares were slightly higher in premarket trading to $54.07, up 0.3%, while Splunk gained more than 9% to $125.
On Friday, it was reported that Cisco had made a $20 billion takeover offer for Splunk, which would represent Cisco's largest acquisition ever.
Separately on Monday, a potential Splunk-Cisco tie-up would be considered "strategically positive" for the Chuck Robbins-led Cisco, Morgan Stanley said.