SplunkNASDAQ: SPLK

Cisco's acquisition of Splunk, valued at $28 billion, is expected to enhance Cisco's gross margins and revenue growth despite a $5.74 billion premium paid on the acquisition. The deal will boost Cisco's gross margins from 64.7% to 66.5% by 2029, driven by Splunk's higher software-focused gross margins. We expect Cisco's revenue growth to increase to 6.3% on average through 2029, significantly benefiting from Splunk's integration and cross-selling opportunities.

AI stocks' forward-12-month earnings growth estimates are falling, contrasting with rising S&P 500 EPS trends, allowing for some new entrants into the key theme. Cisco's EPS revisions are mixed, but potential growth opportunities in AI could lead to a higher valuation amid subdued expectations. Cisco's earnings, valuation, dividend yield, and free cash flow forecasts suggest the stock is undervalued while its technical situation is less sanguine.

Cisco Systems Inc (NASDAQ: CSCO) stock has underperformed this year, falling by about 9% since early January. Cisco's product sales have seen a slowdown as customers have been focused on installing and implementing the products purchased over the last few quarters.

SAN FRANCISCO--(BUSINESS WIRE)-- #splunknews--Splunk Inc., the cybersecurity and observability leader, today announced it will host its 15th annual user conference, .conf24, from June 11-14, 2024, at The Venetian Las Vegas. During the event, Splunk will showcase the power of its unified security and observability platform as attendees from around the globe take part in educational sessions, compelling keynotes and interactive experiences that will make their organizations more resilient. To attend .conf24, p.

Cisco and Splunk Enable Unparalleled Visibility and Real-Time Insights to Standardize Observability in One Solution News Summary:  The new Unified Observability Experience offers customers a cohesive experience across Cisco and Splunk observability solutions, while establishing the foundation for future integrations. Integration and new innovations empower customers with best in class support for both traditional and modern application architectures and visibility across their entire digital footprint.

Cisco exceeded expectations for both EPS and revenue, leading to an increase in its projected 2024 revenue to $53.6-$53.8 billion. Despite this positive news, the stock price only dropped slightly by 0.13%. Analysts believe the fair stock price estimate is $63.63, with a future target of $92.46 by 2029, indicating a "strong-buy" rating and suggesting a potential 28.1% upside and 14.4% annual return. Cisco's valuation is further strengthened by the acquisition of Splunk, which is expected to bring in additional revenue of around $4.21 billion, potentially growing to $5.62 billion for FY2025 as Cisco integrates Splunk into its customer base.

The imminent merger between Splunk (SPLK) and Cisco heralds a new era of innovation in AI-driven cybersecurity solutions.

A healthy traction in the cloud business enabled Splunk (SPLK) to beat fourth-quarter fiscal 2024 earnings estimates.

Although the revenue and EPS for Splunk (SPLK) give a sense of how its business performed in the quarter ended January 2024, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.