What happened

Shares of Splunk Inc. (NASDAQ:SPLK) fell 17.4% in October, according to data from S&P Global Market Intelligence, pulling back along with the broader market despite multiple analyst upgrades.

On the former, note the bulk of Splunk's decline came during the first 10 days of last month, a period when major market indexes plunged from all-time highs, including outsized drops from the tech sector for multiple consecutive sessions.

Stock market data indicating declines.

IMAGE SOURCE: GETTY IMAGES.

So what

To be clear, Splunk had no company-specific news that might otherwise merit its decline last month. To the contrary, at least two analysts weighed in with positive notes even as it fell. 

On Oct. 4, 2018, for example, KeyBanc analyst Liz Verity increased her per-share price target by $12 to $132 -- a nearly 40% premium from today's prices -- and reiterated her "outperform" rating on Splunk stock. Verity cited the potential for Splunk to continue gaining customers by expanding use cases for its leading operational intelligence platform.

The following day, BMO Capital's Keith Bachman reaffirmed his own "outperform" rating and $133-per-share price target, echoing the use case argument and noting that double-digit percent growth in attendees of Splunk's latest user conference indicates continued high interest in its products.

Now what

It likely didn't help that Splunk had already soared 40% through the first nine months of 2018, including a more than 30% gain in August following its 26th straight quarterly earnings beat. Of course, Splunk could resume its upward trajectory if it makes it 16 straight with its next (fiscal third-quarter 2019) report later this month. Until then, however, I think long-term investors would do well to remember that Splunk's decline last month had nothing to do with the relative strength of its underlying business.

Editor's note: This article has been corrected to note that Splunk has beaten its quarterly guidance 26 quarters in a row.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Splunk. The Motley Fool has a disclosure policy.