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Tableau Software (DATA) Q3 Earnings: What's in the Cards?

Tableau Software Inc. DATA is slated to release third-quarter 2017 results on Nov 2. The company has beaten the Zacks Consensus Estimate in all the trailing four quarters, resulting in an average positive surprise of 146.07%.

Last quarter, the company delivered a positive earnings surprise of 300%. Revenues increased 7% year over year to $212.9 million and beat the Zacks Consensus Estimate of $211 million.

For third-quarter 2017, the company expects revenues to be in the range of $213–$223 million, representing 6% year-over-year growth (at the midpoint of this range). Non-GAAP operating income is projected to be in the $5-$13 million range and non-GAAP earnings per share are anticipated to be in the range of 4-11 cents per share.

We note that the company’s shares have increased 88.7% on a year-to-date basis, substantially outperforming the industry’s gain of 29.2%.

Let’s see how things are shaping up prior to this announcement.

 

Factors to Consider

We believe that rising demand for business analytics tools is expected to benefit Tableau Software. Further, the company has been seeing strength in its offerings like the hybrid data architecture platform.

Notably, the company has undertaken a number of initiatives to boost sales productivity and align marketing efforts to drive growth.

Tableau completed the acquisition of ClearGraph in the September quarter. The buyout will aid the company in better competing with other players such as Microsoft’s MSFT Power BI, which already has this capability.

The introduction of new subscription pricing in April for all its products, including Tableau Desktop, Tableau Server and Tableau Online is expected to fuel subscriptions. The company claims that this new pricing model reduces initial investment costs, allowing customers to easily deploy its software at scale.

However, competition from giants such as IBM Corp. IBM and Oracle Corp. ORCL poses a concern.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tableau has a Zacks Rank #2 but its Earnings ESP is -10.72%. Therefore, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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International Business Machines Corporation (IBM): Free Stock Analysis Report
 
Tableau Software, Inc. (DATA): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Oracle Corporation (ORCL): Free Stock Analysis Report
 
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