Barclays’ Raimo Lenschow maintained an Overweight rating on Tableau Software Inc DATA, with a price target of $59.
The stock has plunged 53 year to date, as compared to the flat S&P 500, driven by the Q4 revenue miss and the downward revision of the FY16 guidance.
“If investors can gain confidence that the struggles will be fixed in the near term, this could be a compelling buying opportunity, in our view,” Lenschow stated.
Internal Issues
The analyst believes that the issues faced by the company are associated with the internal sales leadership and execution problems, rather than any external issues associated with competition. However, Lenschow also mentioned that “these are typical growing pains that are solvable.”
Lenschow pointed out that Tableau Software would need to be more flexible in its pricing for large deals, while streamlining its ELA process.
This could be achieved with a new head of sales, given that the previous one had no prior experience of running a large sales team.
Competition
According to the Barclays report, “Competitive threats seem to be top of mind for investors and are a major contributor to the negative sentiment.”
Over the past 18 months, several vendors have launched their offerings in the next-gen BI market, as have some start-up competitors. However, the analyst believes that “many of these products lack the maturity offered by Tableau and are therefore unlikely to be the current cause of Tableau's issues.”
Although Qlik Technologies Inc QLIK currently has a higher stock valuation than Tableau Software, it is also a slower growth company. Lenschow prefers a higher growth stock at a lower valuation.
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