Cowen analyst, Derrick Wood, reiterated his Market Perform rating on Tableau Software (NYSE: DATA) ahead of earnings on August 2nd. Driving greater user/wallet expansion out of the 42,000 installed base is key for growth re-acceleration. But DATA seems caught in the middle of two major forces that are weighing on this. There are two routes to expansion DATA can take: 1) driving greater volume of Desktop sales to casual information users; or 2) deepening its presence with developers/IT for more strategic Analytics platform deployments.

Power BI is forcing DATA to have to discount more to win the less sophisticated user, and we have some concerns that required discount levels could be more acute than modeled. Per the second route, DATA is making some improvements to better address IT, but this will not show up until the v10 release (coming soon) and even then, partners we speak to suggest there are still more advancements needed.

The analyst thinks discounting is greater than normal. He has been hearing of some contracts where DATA is now selling Desktop Pro for $1,200/user. If the list price is $1,999 on the website and package discounts are normally 30%, this implies that DATA is discounting an incremental 15%.

No change to the price target of $53.

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 $56.51 yesterday.