Wunderlich's Breza Offers Defense On Tableau Software; Maintains Buy, $130 Price Target Amid 33% Sell-Off

• Tableau Software Inc DATA shares touched a high of $126.34 on July 17, but are down 31 percent since June 23.
• Wunderlich’s Rob Breza maintained a Buy rating on the company, with a price target of $130.
• High growth rates and superior products warrant a premium valuation for Tableau Software, Breza believes.

The recent significant sell-off in Tableau Software’s shares has created a significant buying opportunity for investors, analyst Rob Breza mentioned. The downtrend in shares followed a presentation by the company on stiffening competition from new offerings and updates.

Terming the plunge in Tableau Software’s share price as a “gross overreaction,” Breza noted that the company is a dominant market visualization technology leader addressing the explosion and harnessing of big data needs of business users. The company is expected to grow more than 50 percent this year, with the market continuing to transition to BI 2.0.

Tableau Software had reported better-than-expected 2Q revenues and EPS of $149.9 million and $0.07, respectively, driven by new customer additions. The company’s robust operating margins were driven by strong revenue growth. A 70 percent increase in its deferred revenues during 2Q resulted in the company guiding to 3Q revenues ahead of the consensus.

An expanded market opportunity is expected to allow Tableau Software to exceed its record of 233 large transactions over $100,000 in the last quarter, besides boosting the number of new customers. Breza added that the company’s high growth rates and superior products warrant a premium valuation.