Citigroup Expands Big Data Coverage, Names Alteryx, Tableau Software, Talend As Top Picks

Citigroup reshuffled its coverage of big data and analytics software stocks, initiating four stocks — including two new top picks — and updating their views on another four.

The Analyst 

Analyst Tyler Radke assumed coverage of the group and named Alteryx Inc AYX, Tableau Software Inc DATA and Talend SA ADR TLND as top picks.

The Thesis 

No. 1 on the list is Alteryx, given its “best-in-class” customer expansion rates and new artificial intelligence and machine learning products, Radke said. Customer expansion is expected to exceed 130 percent, driving top-line growth of more than 40 percent, the analyst said. (See Radke's track record here.) 

The risk to Alteryx tied to the release of Tableau Prep is overblown, presenting an opportunity to buy, Radke said. Short interest in the stock is around 23 percent of float compared to only 6 percent in January.

For its part, Tableau’s transition toward its subscription model is expected to be in “full swing” in fiscal 2019, driving a new acceleration in revenue, margins and free cash flow, Radke said. 

“Recent fieldwork gives us incremental confidence in continued strong growth as organizations standardize on Tableau,” the analyst said, adding that his estimates are “well above the Street.”

Talend, although not the biggest growth opportunity, “checked the most boxes” in Radke’s review and is seen as the least risky of the three.

“We think cloud industry tailwinds only continue to strengthen where Talend is well-positioned.”

The Ratings

• Alteryx Inc AYX initiated at Buy, $57 price target.
• Cloudera Inc CLDR reiterated at Buy, $21 price target.
• Hortonworks Inc HDP initiated at Buy, $27 price target.
• MicroStrategy Incorporated MSTR reiterated at Neutral, $144 price target.
• Mongodb Inc MDB initiated at Neutral, $56 price target.
• Tableau Software Inc DATA reiterated at Buy, price target raised from $107 to $123.
• Talend SA ADR TLND upgraded from Neutral to Buy, price target raised from $50 to $72.
• Teradata Corporation TDC initiated at Neutral, $42 price target.

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