Manufacturing Dashboard

A data analytics dashboard aimed at manufacturing companies. Data source: www.qlik.com.

What: Shares of Qlik Technologies, (NASDAQ:QLIK) fell 13.9% during October, according to S&P Capital I.Q.  data.

So what: Qlik's stock fell just over 11% on Oct. 23, the day after the company released third-quarter 2015 earnings. Qlik reported a revenue increase of 8%, which represented a more moderate pace sequentially against second quarter growth of 11%.

While in constant currency terms, revenue expanded 20% during the quarter, it climbed 26% in constant currency during Q2 2015. In other words, even after adjusting for currency effects, the third quarter still evidenced a bit of curbed sales momentum from earlier in the year.

Management cited many positives in the quality of the quarter's revenue growth, including improvement in number of deals with first year revenue over $100,000 (130 versus 108 in the comparable quarter), number of deals over $250,000 (34 versus 23 in the prior year), and deals over $1,000,000 (eight versus seven). 

At the same time, the company slightly lowered full year estimates. Management dialed back the full-year top-line forecast to between $613 million-$618 million, from a previous range of $610 million-$620 million. Non-GAAP diluted earnings per share for 2015 were pulled back from $0.30-$0.33, to a new estimated range of $0.29-$0.31.

While it's easy to argue that the full-year revisions simply tightened up in accuracy as management gained a clearer picture of the fourth quarter, shareholders nonetheless interpreted the above as lowered guidance, which technically, it is. And as is often habitual with shareholders when estimates get revised, the "QLIK" ticker sold off.

Now what: After enjoying an appreciable gain through the first nine months of the year, Qlik's stock has reversed course. Below we can see Qlik's performance year to date through the end of September, with competitor Tableau Software (NYSE:DATA) thrown in for some perspective:

QLIK Chart

QLIK data by YCharts.

Now, we'll look at how quickly nine months of stock gain can get upended. Below are the same two companies, Oct. 1 to date:

QLIK Chart

QLIK data by YCharts.

The difference between these diverging fortunes arose on Nov. 5, when Tableau announced Q3 2015 earnings that significantly exceeded market expectations. Tableau reported revenue growth of 67% versus the prior year, which was charged by a 75% international sales increase.

The two data analytics providers are of roughly similar size; through the first nine months of the year, Qlik has recorded $407.2 million in revenue, and Tableau has booked $450.8 million. So the two often get compared to each other. The notion that Tableau may be pulling ahead in the ability to scale revenue is likely contributing to some of the post-October pessimism in Qlik's stock.

However, these are but short-term considerations. Qlik will finish out a successful year in a few weeks, and the business remains sound. Despite continuing GAAP losses that are not uncommon for a small software company, Qlik maintains a strong balance sheet and positive operating cash flow generation -- the company produced $56.1 million in operating cash flow through the first three quarters of 2015. At the end of the day, investors have a succinct message for management as evidenced by the stock's recent weakness: More revenue growth, please.

Asit Sharma has no position in any stocks mentioned. The Motley Fool recommends Qlik Technologies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.