Is it too late to buy Splunk stock after a 14% post-earnings pop?

Splunk Inc (NASDAQ: SPLK) is up nearly 14% on Thursday after reporting a strong second quarter but a Bank of America analyst dubs it a drop in the bucket compared to where the stock is headed.

Splunk stock could climb further to $150

On Thursday, Brad Sills added the cloud stock to his list of “top picks” and raised his price objective to $150 – a near 35% upside from here.

The analyst recommends owning Splunk stock to play a continued increase in demand for machine data processing. His research note reads:

The software company now expects its revenue to surpass $1.0 billion in the current quarter – some $45 million ahead of analysts.

Why else is he positive on this cloud stock?

Brad Sills was particularly uplifted by the company’s free cash flow that nearly quadrupled in the second quarter. Expanding cloud margins also factored into his bullish view on the Splunk stock.

The Bank of America analyst is convinced that the Nasdaq-listed firm can surprise to the upside in terms of annual recurring revenue. Continued improvement in productivity moving forward could also serve as a catalyst for the cloud stock, he added.

Earlier this week, Garda Capital Partners revealed to have bought 4,225 shares of the California-based company for just over 400,000 in total.

Note that Splunk stock is already up more than 35% versus its year-to-date low at writing.