Tableau Software (DATA, Financial) impressed everyone with terrific results in the first quarter 2015. The company displayed solid improvement in its key metrics, delivering better than expected figures on revenue and earnings. The main reason behind this success is the growing demand for Tableau products in the market. The management is now confident of a solid performance in the rest of fiscal 2015.
Another exciting thing to note here is the success of the company in adding new customers. With a fast growing customer base, Tableau looks well prepared for better performance in the upcoming quarters. Let us have a look at what Tableau has in its store and what to come out of its pipeline in future?
A strong performance and prospects
Tableau’s quarterly revenue rose by 75%, which is a solid improvement. This also attracted investors leading to good improvement in the market share. There is robust traction in the market for Tableau products which are contributing well to its growth. Not only domestically, but the company is seeing good sales on the international fronts as well. This is evident by an impressive 89% growth in the year over year revenue. With many upcoming new products, Tableau looks well prepared for an upbeat performance in future.
Tableau’s solid entry to the fiscal 2015 clearly demonstrates its strong market presence and hold. The company’s strategy of new customer acquisition seems to be working and it is now serving more than 29,000 customer accounts across the globe. In addition, Tableau is expanding its footprints in the international markets as well. Following a solid 89% growth in the international business, Tableau has recently announced opening of its office in France. This seems to be a wise move by the company, as France represents the third largest market for its products in the EMEA region.
The analysts on the other hand are expecting a solid boom in the Western European big data market. The market is expected to grow at CAGR of 24.6% between now and 2018. This can be a solid long term opportunity for Tableau. In the midst of this, its decision to capture France will play a major role in this. To further support this, it is making significant investments to tap potential out of it.
A strong pipeline
Moving ahead, if we look at the products pipeline, Tableau released Tableau 9.0 containing big advances in analytics. To its surprise, the company saw a solid 78% more registration than it saw with Tableau 8. This demonstrates strong customer demand and further market penetration. To promote this product the company also kicked off a Tableau 9.0 road show bringing hands-on experience to thousands of customers in 20 countries.
Tableau 9.0 is definitely a next step in Tableau’s journey to help people achieve more with data. Tableau 9.0 offers significant advances in the areas of visual analytics, performance, scalability, data preparation, and enterprise capabilities. These epic features should help the company to gain good market share in future.
Conclusion
Now looking at the fundamentals, the stock is expensive with a trailing P/E of 5,442.86 while the forward P/E of 168.09 shows solid earnings growth in the near term. As the demand for Tableau products is increasing it can also be a solid long term holding as its earnings are growing with a CAGR of 32.43% which is more than the industry average of 20.27%. Considering all these points, I would like to suggest the investors to definitely pick Tableau Software as of now. The stock is expensive, but considering the profit associated with the stock, they shouldn’t mind paying heavy premium for it.
