Combining Value, Growth and Momentum
10x Stocks - Searching for multibaggers
  • Blog
  • Performance
  • Investment strategy
  • About

Tableau Software (DATA) - Overvalued or good investment oportunity?

4/26/2015

1 Comment

 
Tableau Software is a data visualization company, that aims to bring cheap analytics to millions of business owners and regular users. Based on core technologies originally developed at Stanford University, their products reduce the complexity, inflexibility any expense associated with traditional business intelligence applications. DATA makes 32% of revenues from Maintenance and Services (growing by 83%), while 68% comes from software licensing (75% growth YoY).

DATA is a first mover in Big data analytics industry, which is expected to grow by at least 25% until 2018 to $46 Billion (source ReportsnReports.com). Investment bank Cowen and Co. expects Tableau to capture 30% of business intelligence license market by 30%. According to Tableau's website, total data volume will reach 20 Exabytes by 2020, growing by 48% annually.

Companies like Microsoft and IBM have already realized the potential of this business and are developing or have already launched their own products. While they have larger resources than Tableau, no big data analytics company grows revenues and acquires customers as fast as Tableau. They are reinvesting all money into sales and R&D as can be seen on their financials:

Picture
Wall Street expects revenue growth of 70% for this stock, while management is more conservative at 45%. The tricky part about Tableau Software are it's profits. Since the company reinvests everything back in the business, it is hard to tell what it's margins will be. As such it is difficult to compare it to any other publicly available stock. Only QLIK Technologies (QLIK) comes close, trading at 5x sales (vs. 17.5 for DATA), although they grow much slower at 20% per year. Valuation is very difficult, when there are few companies to compare to and DATA generates no profits.

Why I'm going long

Tableau offers free trials on most of their products, so customers can try them out easily and decide whether to pay for more or not. Vast majority of accounts expand over time, which demonstrates that the software is popular and can spread quite quickly. Revenues are growing quickly, and Wall Street has noticed this stock some time ago, which is also reflected in it's valuation. DATA has demonstrated innovation and acquires customers at an incredible pace. Their customer conference, which is meant to build a community of enthusiasts and get feedback for their products had 180 attendees in 2008, and 5500 in 2014. At the end of last year, Tableau had 13 patents issued for their software and 25 more pending. One big risk is their issuance of stock, last year they increased number of shares outstanding by 11%, what's always a big risk in technology stocks.

I believe the company has a lot of market potential with current products, plus can develop market leading software for the future. Going long today at open with a stop loss like I always do (wouldn't recommend buying this stock without SL).
1 Comment
kunal gaikwad link
2/11/2022 01:49:49 am

What an amazing post! I always look forward to reading your posts.
They are so engrossing and well-written. The way you consider your readers' preferences and leave a hint of personally relatable experiences is simply exceptional. There are always a few lines in your posts that stick with me and keep me hooked on your writing. Reading one of your blogs immediately makes visitors want to read another and share it. This post was wonderful, and please continue to share such blogs in the future.


I believe that my expertise in the field in which you write will be very beneficial to you. You can get a sense of my writing style by browsing through my high-quality content

Reply



Leave a Reply.

    To make money in stocks you must have the "the vision to see them, the courage to buy them and the patience to hold them". And patience is the rarest of the three.  Thomas Phelps

    Follow @BestStocksNow

    Categories

    All
    Best Stocks Of 2013
    Best Stocks Of 2014
    HK Stocks
    Indian Stocks
    Long
    Uk Stocks
    US Stocks

    Archives

    April 2021
    January 2021
    September 2020
    August 2020
    May 2020
    August 2019
    July 2019
    June 2019
    February 2019
    May 2018
    August 2017
    July 2016
    February 2016
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    September 2014
    August 2014
    July 2014
    June 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013

    RSS Feed

Powered by Create your own unique website with customizable templates.