Shares of data search, analytics, and cloud monitoring software company Splunk (NASDAQ: SPLK) are finally rising again after a beating from investors the last few years. Profitability, at least as measured by free cash flow, is solidly in positive territory, and generally accepted accounting principles (GAAP) net income is nearly break-even. With the economy slowing rapidly in 2023, these are the only real metrics most investors care about right now, and shares have rallied as a result. 

However, though Splunk was an early pioneer of searchable unstructured business data, it's fallen behind the curve of many of its peers. A new management team is trying to get up to speed and is making progress on this front too. But is Splunk stock's rally for real? 

Splunk was late to make a full pivot to cloud-based software and modern pricing for its customers. To be fair, Splunk is still growing in spite of this, benefiting from a general migration from legacy IT to massive-yet-efficient cloud-based infrastructure of today. But its transition from legacy customer billing to cloud software billing created an accounting profit headache for investors in the last few years. At least the trough for GAAP net income is far in the rearview mirror at this point. 

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Source Fool.com