Tableau Software (DATA) PT Raised to $88 on Strong Q3 Results

FBR Capital analyst Daniel Ives bumped his price target on Tableau Software (NYSE: DATA to $88.00 (from $78.00) following strong results after the close that beat the beat the Street across the board, with both the top and bottom lines coming in above expectations, while it also posted a "rock-solid" billings number (21% above Street expectations). December quarter and initial FY15 guidance also came in well ahead of the Street, while ongoing investments in the business are expected to continue limiting margin expansion over the coming quarters. The firm stopped short of upgrading the stock and maintained a Market Perform rating.

Ives commented, "That said, we believe Tableau clearly continues to experience strong tailwinds in its core Tableau Desktop/Server software within its existing installed base and through the addition of new customers. The company capitalized on its unique user-friendly data visualization technology again in 3Q, posting yet another quarter of solid top-line growth (71% YOY, versus 82% YOY in 2Q) as larger deal sizes, a ramping sales force, and international expansion boosted revenue. On the bottom line, leverage in the model led to the company exceeding Street estimates as Tableau’s top-line strength helped it post positive operating margins despite continued hiring (e.g., sales force, product development). With robust big data analytics demand trends and picture-perfect execution adding fuel to Tableau's growth engine, we believe the company has further growth opportunities as it expands both domestically and internationally in coming quarters/years, with international proliferation a key ingredient in the company's recipe for success, in our view. Overall, we believe Tableau is in the right place at the right time and that its rapid growth speaks to company-specific tailwinds as well as massive secular trends (e.g., big data analytics) at enterprises of all shapes and sizes."

The firm is raising total revenue and pro forma EPS estimates from $111.8 million and $0.01 to $121.2 million and $0.15, respectively, given stronger-than-expected adoption and deal size growth. For FY15, they are raising total revenue and pro forma EPS estimates from $497.0 million and $0.15 to $547.0 million and $0.34, given the strength in the business and despite more aggressive hiring anticipated for FY15

For an analyst ratings summary and ratings history on Tableau Software click here. For more ratings news on Tableau Software click here.

Shares of Tableau Software closed at $76.50 yesterday.

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