Shares of Splunk Inc. /zigman2/quotes/203060494/lastsale SPLK -2.98% are up 2.7% in premarket trading Monday after Goldman Sachs analyst Christopher Merwin upgraded the stock to buy from neutral. He is upbeat about the company's new pricing strategy, which in his view "decouples revenue from indexed log volume and instead charges by use case, allowing customers that were previously wary of ballooning costs on Splunk to open up more data for use on the platform." He also argued that Splunk's decision to start reporting annual recurring revenue will provide more clarity to investors, and he thinks the company's free-cash forecast through fiscal 2023 helps "de-risk" Splunk's story as the company finishes its transition away from perpetual licenses. "Lastly, we see catalysts for over-delivery in the coming quarters, not only due to the benefit of the pricing change, but also from the recently-acquired SignalFX, which we estimate could contribute $84 million to revenue next year," Merwin wrote. He boosted his price target to $180 from $147. Splunk shares have increased 21% over the past month, as the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.51% has gained 2.4%.