Shares of Tableau Software Inc. (DATA) were down a staggering 35% in after hours trading on disappointing earnings, and shocking many investors and analysts. Indeed, shock might be an understatement here. Jefferies stated before the earnings announcement: We expect Tableau Software to report solid 4Q sales, driven by international expansion and strength in big deal activity. There will likely be increased focus on license growth as investors try to determine the trajectory of growth after moderating the past couple quarters. We note DATA’s guidance last Q which showed moderating growth partially due to a tough comp, although we expect a continued robust demand environment for data visualization analytics.
But analysts are not giving up on Tableau Software Inc. even post earnings.
Tableau Software Inc – UBS states:
In a risk-off tape for high growth software, margin of execution error is the lowest in recent memory, and where investors appear to increasingly be taking a wait-and-see approach in supporting beaten-down, yet high-quality stories. With DATA falling in these cross-hairs, a reiteration of DATA’s +30-33% CY16 topline guide will only suffice on the heels of a sizeable 4Q beat, we think. DATA beat its last 2 4Qs by $14M, $20M (lic $12M, $17M) and with current St lic revs (+33% y/y, +23% q/q) well below +42% 5-yr seasonality we think room for upside remains, particularly given the easier set-up into the print (shares -16% YTD). With peer MSTR recently reporting +20% product growth post ~2yrs of tumult, we see a positive read on demand for DATA and believe the 26ppts (24ppts vs. St) of implied topline decel could prove conservative given: 1) CY15 on track for $100M+ more revs, $30M+ more op profit than original guide (3Q14); 2) 67% more S&M capacity into CY16; 3) broader uptake of server product, driving large deals; and 4) greater partner leverage (Infosys, 7 new OEMs, signed in CY15). We continue to believe the TAM opportunity is large any way you slice it, with room for multiple vendors, and as such think DATA can keep up 30%+ growth in MT.
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