D.A. Davidson Expects In-Line Q1 From Tableau Software, Although Investor Sentiment Remains Mixed

D.A. Davidson sees in-line results from Tableau Software Inc (NYSE: DATA) when the Seattle, Washington-based provider of business intelligence software reports its first-quarter numbers on May 5.

Earnings Expectations

Analyst Jack Andrews expects a non-GAAP loss per share of $0.11 versus consensus estimate that calls for a loss of $0.10 a share. The analyst projects "first quarter revenue to grow 28.6 percent year-over-year (YoY) to $167.4 million, exceeding consensus estimate of $163.9 million and the company guidance of $160 million–$165 million (22.9–26.8 percent YoY growth)."

Related Link: Tableau Software Is "Getting Aggressive," Goldman Expects Earnings Beat

Andrews noted that the investor sentiment remains "mixed at best" on "fears around competition, pricing, a salesforce transition and overall macro spending."

"Given this setup, we believe patient investors will be rewarded, as expectations for the 'magnitude of the beat' have substantially diminished. We also note that DATA is becoming a large software company, as we anticipate revenue to exceed $1 billion in 2017," Andrews wrote in a note.

The analyst noted Tableau's significant investment in R&D provides a notable competitive advantage in the big data/analytics space, which Andrews estimates to be a $250 billion market opportunity over the next 20 years.

"We continue to believe this market is still in its infancy, and that there is room for multiple vendors to succeed over time, as most of the business remains greenfield, and the technology category is totally horizontal in nature," Andrews elaborated.

Ratings And Another Analyst's Expectations

Andrews maintained his Buy rating and $101 price target on the stock, saying, "In our view, DATA needs to string together a few solid, uneventful quarters in order to reinvigorate its share price."

Meanwhile, Brean Capital also sees in-line results for the first quarter and said the company needs a massive sales reorganization to cater large deals in the sector.

Shortly after Tuesday's opening bell, Tableau was down 2.90 percent at $50.63.