Customer Spending Slowdown Has Driven Tableau’s Weak Guidance



Tableau taking a prudent stance

As discussed in the previous article, shares of Tableau Software (DATA) fell by almost 50% on February 5, 2016, after the company gave a weak earnings outlook for 2016. Tableau attributed its weak outlook to a slowdown in customer spending.

Tableau projected revenues for 2016 to be between $830 million and $850 million, lower than its previous forecast of between $845 million and $865 million. Earnings per share (or EPS) are expected to be between $0.22 and $0.35. In comparison, analysts expect revenues of $849.04 million and EPS of $0.55 for 2016.

“Based on what we’re seeing in the environment and the buying patterns of our customers, we are taking a prudent stance as we begin the year,” said Tableau’s chief financial officer Thomas Edward Walker.

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Tableau could lose ground to competitors

Mizuho Securities analyst Abhey Lamba stated that Tableau could lose ground to its competitors going forward. He noted that license sales for Tableau missed forecasts for the first time, indicating an “intensifying competitive environment.”

“While the company attributed this softness to a tougher spending environment, we are not fully convinced as other players in the space had better-than-expected performance,” Lamba said.

Over 88% of Fortune 500 companies, including Cisco (CSCO), Wells Fargo (WFC), and Capital One (COF), use Tableau. Tableau Online is one of the company’s fastest-growing products, with more than 3,000 customer accounts. Tableau hired over 1,000 employees in 2015 and currently has overall employee strength of 3,000.

Tableau accounts for 1.1% of the iShares North-American Tech-Software ETF (IGV).


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