What happened

Shares of Coupa Software (COUP) fell 16.3% in September, according to data from S&P Global Market Intelligence. Early in the month, the company delivered strong second-quarter results, but the stock was caught up in the market's wider pessimism about the tech sector.

So what

The maker of business spend management tools actually crushed Wall Street's second-quarter expectations. Earnings tripled year over year to $0.21 per share while revenues rose 32% to $125.9 million. The average analyst would have settled for earnings near $0.08 per share on sales in the neighborhood of $119 million.

Management also issued bullish guidance for the third quarter and raised its full-year targets. The report inspired a plethora of rosy analyst reports and raised share-price targets. The stock still closed 6% lower the next day, continuing a string of daily drops that started with the tech sector panic of Sept. 3.

Photo of a bear in front of a red chart trending downward.

Image source: Getty Images.

Now what

I can't blame Coupa's investors for getting nervous. The stock price is still nearly double what it was a year ago, and it has risen by a remarkable 750% in three years. The stock was ripe for a correction last month, and even in its wake, Coupa still can't be called "cheap" or "affordable" by any reasonable standard. We're looking at a powerful growth stock barreling down Wall Street like a tank, armed with tons of revenue growth in the face of generally negative earnings. The next few quarters may be rocky, depending on investor reactions to the ongoing COVID-19 crisis and other events beyond Coupa Software's control. In the long run, this company will do just fine, and so will its shareholders.