How Deals, Customers Are Helping Calm Fearful Tableau Software Investors

• Tableau Software Inc DATA shares have appreciated 25.6 percent over the past month, surging to $102.15 on November 6.
• Pacific Crest’s Brent Bracelin has reiterated an Overweight rating on the company, with a price target $138.
• Bracelin believes that the increase in large deals and the company gaining new customers would allay investor concerns regarding the competitive landscape.

Analyst Bracelin mentioned that there has been a 27 percent sequential rebound in large deals, along with robust 74 percent international growth and sustained “new customer strength.”

According to the Pacific Crest report, there could be 57 percent upside potential to the current share price.

The company posted robust Q3 results, with revenue growth of 14 percent quarter-on-quarter and 63.5 percent year-on-year, ahead of the consensus expectations, driven by “a record 3,100 new customer additions and a 27 percent q/q rebound in large deals in excess of $100,000, which rose to 296 from 233 in Q2.”

Although there was a slight deceleration in international growth, it was not as much as those faced by Tableau Software’s enterprise software and security peers. “The strong growth metrics should calm investor fears that increasing competition was delaying deal cycles and could slow growth,” Bracelin said.

Given that the guidance has been conservative over the past two years, Bracelin believes that the early 2016 outlook would also prove to be conservative.