Morgan Stanley: Tableau's Q1 Suggests A Smooth Path

In a report published Friday, Morgan Stanley analysts maintained an Overweight rating on Tableau Software Inc DATA, while raising the price target from $114 to $125, after the company reported robust 1Q15 results. Tableau generated about 75 percent y/y top-line growth, with deals exceeding $100K, representing acceleration in growth to 108 percent. The company reported growth in new customer adds of about 45 percent. The results indicate "Tableau's steady march into strategic enterprise transactions, all the while avoiding the hiccups/restructurings normally seen with similar transitions in the software space," the analysts said. In the report Morgan Stanley noted, "With enhancements to enterprise capabilities and scalability with Tableau 9.0, Tableau should see broader enterprise deployments and strength in new customer adds – a continuation of trends seen over the past few quarters." Tableau reported Q1 license revenue of $84.4M, up 74 percent y/y, ahead of the consensus. "Large deal metrics continue to be strong while international sales is ramping well, +85% YoY and now at 24% of revenue. Sales productivity is improving, with license revenue per productive rep up 9% in Q1 after ~6% growth in FY14," the analysts wrote. Tableau raised its FY15 revenue guidance by $32.5M at the midpoint, from $565-$580M to $600-$610M. "With Q2 revenue guidance of $135-140M, this implies growth decelerates from 75% in Q1 to 52% in Q2 and ~36% in 2H, which is likely conservative given sales investments and improvements in productivity," the analysts added.