The shares of Splunk Inc. (NASDAQ:SPLK) and Genworth Financial Inc (NYSE:GNW) were among the active stocks of the last trading sessions. Splunk Inc. (NASDAQ:SPLK) declined to -6.13% closing at the price of $94.94 whereas the shares of Genworth Financial Inc (NYSE:GNW) soared 6.05% with the increase of 0.26 points closing at the price of $4.56. Splunk Inc. has currently decrease -17.33% in its stock over the period of 6-months while its rival Genworth Financial Inc added 42.95% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Splunk Inc. (NASDAQ:SPLK) is -22.6% while the ROI of Genworth Financial Inc (NYSE:GNW) is 4.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SPLK’s EBITDA Margin is -55.18 whereas GNW’s is 5.71.
Both the profitability ratios suggest that Genworth Financial Inc (NYSE:GNW) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Splunk Inc. (NASDAQ:SPLK) reported $0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $0.05/share Thus beating the analyst Estimates with a Surprise Factor of 60 Percent. While, Genworth Financial Inc (NYSE:GNW) reported EPS of $0.29/share in the last quarter. The analysts projected EPS of $0.26/share depicting a Surprise of 11.5 Percent.
Taking a look at Earnings per Share, Splunk Inc. tends to be beating the analyst estimates more than Genworth Financial Inc. so SPLK is more profitable than GNW.
Technical Analysis of Splunk Inc. & Genworth Financial Inc
Moving average convergence divergence (MACD) shows that Splunk Inc. (NASDAQ:SPLK) is on a PRICE RELATIVITY trend While Genworth Financial Inc (NYSE:GNW) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Splunk Inc. was in BULLISH territory and Genworth Financial Inc was in BULLISH territory.
SPLK’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While GNW’s candle is BULLISH with HIGH.
EPS Growth Rate: SPLK’s 35.67% versus GNW’s 5%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Splunk Inc. (NASDAQ:SPLK) is predicted at 35.67% while Genworth Financial Inc (NYSE:GNW) stands at 5%. These numbers suggest that SPLK is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of SPLK stands at 1.7 while GNW is at 0 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.34.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 1.9 for SPLK and 3 for GNW which means SPLK has Buy rating whereas GNW has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for SPLK is $132.06 which is 28.11% of its current price while GNW has price target of 4.5 which is -1.33% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
SPLK currently has price to earning P/E ratio of 0 whereas GNW has 6.14 while the forward P/E ratio for the prior stands at 60.7 and for the later it depicts the value of 3.88.
The price to Book P/B for SPLK is 12, Price to Sale is at 9.39 and for GNW these ratios stand at 0.18 and 0.28.