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Can Tableau Software (DATA) Surprise in Q1 Earnings?

Tableau Software, Inc. DATA is set to release first-quarter 2016 results on May 5. Last quarter, the company delivered a negative earnings surprise of 533.33%. Overall, the company has delivered negative earnings surprises in three of the last four quarters, with an average miss of 181.23%.

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

Factors to Consider

Headquartered in Seattle, WA, Tableau Software engages in providing analytics and data visualization software. The company offers Tableau Desktop, Tableau Server and Tableau Public. It also provides related maintenance & support as well as professional and training services. Tableau’s customers total over 39K and are spread across 150 countries.

Tableau currently targets growth in the international market, as is evident from the fact that a substantial part of its revenues is generated from its business outside the U.S. and Canada. In January this year, the company opened a data center in Dublin, Ireland, its first in the European region. In Aug 2015, the company had launched its operations in China which can be a key growth driver. Tableau Software partnered with companies like PostUp, Deloitte and NetSuite for providing analytics solutions.

For the first quarter, the company expects revenues to be around $160 million to $165 million. Non-GAAP operating loss is projected to be around $8 million to $13 million and non-GAAP loss per share is likely to be in a range of 8 to 12 cents per share.

Earnings Whispers

Our proven model does not conclusively show that Tableau Software is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Tableau Software has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 45 cents.

Zacks Rank: Though Tableau’s Zacks Rank #3 (Hold) increases the predictive power of ESP, we need to have a positive ESP to be confident about a beat.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Fitbit Inc. FIT has an Earnings ESP of +175.00% and a Zacks Rank #2 (Buy).

ACI Worldwide, Inc. ACIW has an Earnings ESP of +12.50% and a Zacks Rank #3. International Ltd. CTRP has an Earnings ESP of +11.43% and a Zacks Rank #3.

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