Splunk Stock is Falling Along With Revenues. Why?

No matter how hard we try to follow best practices – diversify, don’t try to time the markets, use dollar cost averaging – we always find ourselves reverting back to bad habits. Of the 32 positions we’re holding right now, two of them we engaged in a bit of market timing on – Alteryx (AYX) and Splunk (SPLK) – which dropped -40% and -25% respectively at which time we went long. Today, both of those positions are in the red, which means we’re accumulating them at an even bigger discount. Today, we’re going to talk about why Splunk’s annual revenues appear to be falling along with their stock price.

People always Google “why is stock price X falling” when things start going south. Even Google can’t answer that question. What investors should be asking is “has my thesis changed?” In the case of Splunk’s falling stock price (down -42% from a peak of $219.33 a share), we want to make sure our thesis hasn’t changed as we continue accumulating at these prices. The first thing we want to look at