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Competition between Splunk, Inc. (SPLK) and Amazon.com, Inc (AMZN): Analysts Weigh In

By Howard Kim 

Splunk Inc. (NASDAQ:SPLK) is a US-based provider of software products that help organizations in getting real-time intelligence out of their data. The firm has been in news after a Wall Street Journal report on Sunday, which said Amazon.com, Inc. (NASDAQ:AMZN) is expected to announce a new business intelligence service at its annual conference this week. Amazon’s new offering is perceived as a competition to Splunk’s cloud offering. Following this news, William Blair and UBS weighed in.

Yesterday, Bhavin Suri from William Blair maintained an Outperform rating on Splunk’s stock. As per Suri, investor concerns about competition from Amazon’s offerings are overblown.

In a research note, Suri tells investors, ”The article follows an announcement by Amazon Web Services last week that it launched a managed version of Elasticsearch, which suggests the tech giant is making a move to enter the ‘big data’ analytics space where Splunk competes.”

According to The Fly, Suri believes a majority of Amazon’s applications will be document search and will not be a direct competitor to Splunk. He believes Amazon’s offering will directly compete with vendors such as Tableau (DATA) and Qlik Technologies (QLIK), but not with Splunk.

Analyst Bhavin Suri has an overall success rate of 59% recommending stocks. Since 2009, Suri has earned a 6% average return per recommendation.

On the same day, Brent Thill from UBS weighed in after speaking to Splunk’s management following the news of Amazon’s expected announcement. Thill maintained a Buy rating on Splunk’s stock with a price target of $76.

Thill sees the Amazon launch as a “Wall Street headline risk” and not an immediate competitive risk to Splunk’s financials. In a report titled, “All Analytics Not Created Equal,” Thill says that Amazon’s products are more high-level and less solution-centric when compared to Splunk’s products.

Brent Thill is ranked 110 out of over 3,700 analysts ranked by TipRanks. He has an overall success rate of 67% when recommending stocks and an average return per recommendation of 12.8%.

Based on TipRanks’ statistics, of the 15 analysts who have recently rated Splunk in the last 3 months, 12 have rated it as Buy, while 3 have rated it as Hold; none of the analysts have recommended to Sell Splunk’s stock. As per the recent ratings of all the 15 analysts, the average 12-month price target for the stock is $77.27; marking an upside of nearly 40% over current levels.