'Getting Comfortable' With The Tableau Software Story

Following the release of first-quarter results by Tableau Software Inc (NYSE: DATA), BTIG said it is getting comfortable with the story. As investors gain more comfort with bookings quality, the firm thinks the multiple will expand, as in the case of other subscription transition stories in enterprise software.

That said, analysts Edward Parker, Joel Fishbein and Abhinav Kapur believe attempts to delineate fundamental deceleration and competitive pressure from compressive effects of license transition will undoubtedly continue.

Q1 Print

BTIG noted the company delivered in line headline numbers and outlook. Nevertheless, the firm is of the view that the results were indicative of strong execution, and perhaps less disruption than feared, around accelerated subscription transition.

"While there's still wood to chop, the quarter was another important step towards proving that the demand is there. Pricing is now more aligned with customer buying preference," the firm opined.

Additionally, the firm said it believes the fiscal year targets look conservative and likely understate the health of new business due to ratable transition, suggesting risk to the upside.

Taking Stock Of The Stock

Following the first-quarter results, the firm continues to see a favorable path for the stock for the fiscal year 2017, as new leadership is bringing tighter executional focus while expectations have been meaningfully reined in.

"May 25th analyst day should bring additional color/disclosure about this transition, which we believe is driving more interest in the stock," the firm said.

BTIG reiterated its Buy rating on the stock and its $65 price target.

At the time of writing, Tableau Software shares were rallying 7.82 percent at $58.98.

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