Wedbush Highlights 'The New Business Intelligence'; Reiterates Outperform On Qlik, Tableau

• Shares of Qlik Technologies Inc QLIK have declined 9.29 percent over the past three months, while those of Tableau Software Inc DATA have appreciated 22.57 percent in the same period.
• Wedbush’s Steve Koenig has reiterated an Outperform rating on both companies, with a price target of $43 on Qlik Technologies and of $116 on Tableau Software.
• Koenig believes that data discovery vendors like Qlik Technologies and Tableau Software are disrupting the existing BI market, while putting pressure on legacy incumbent vendors.

BI Market Disruption

Analyst Steve Koenig believes that “the new generation of BI technology will provide room for several data discovery vendors – targeting different subsets of the large and variegated set of BI use cases – just as the prior generation of ad hoc query and reporting tools did.”

The trends that appear to be disrupting the BI market include visual analytics, interactive user interfaces, end-user self-service, in-memory processing, mobile access, application of distributed computing technology to large data stores and cloud computing.

Disruption Only Beginning

Now Koenig believes that this disruption is only in its initial stages and that the potential TAM for data discovery could eventually prove to be significantly more than the market for traditional business analytics software.

Also, with increasing demand for mobility, Koenig expects to see “SaaS or other cloudbased approaches constitute an increasing share of BI deployments.”

However, Koenig also expects migration to the cloud to be “more gradual than we’ve seen in other enterprise application categories, and most enterprise cloud deployments are likely to be part of a hybrid (on-premise and cloud) approach for years to come.”

In addition, although there has not been any meaningful industry consolidation since mid-2000, there could be a possibility of “one or more significant transactions in the near future.”

Qlik Technologies & Tableau Software

According to the Wedbush report, Qlik Technologies’ stock valuation does not reflect the potential of the company’s “differentiated offering.” Koenig expects to see sustained license growth for the company close to the 20 percent level.

For Tableau Software, Koenig said, “We believe DATA’s adoption momentum and its large, expanding opportunity in the BI market is likely to lead to upside relative to investor expectations.”