Tableau Effect Sinks Splunk, Other Cloud Stocks

Shares of cloud software firms, including Splunk Inc (NASDAQ: SPLK), have plunged after peer Tableau Software Inc (NYSE: DATA) reported slower growth in license revenues and provided lukewarm forecast for the first quarter and full year. Tableau lost half of its value on the news.

Tableau, whose license revenue growth slowed to 31 percent from 57 percent in the third quarter, sees a loss of 8 cents to 12 cents per share on revenue of $160 million to $165 million for the 2016 first quarter. The forecast missed Street expectations that call for earnings of 6 cents a share on revenue of $179.5 million.

On the news, software firm Splunk plunged as much as 39 percent to touch a 52-week low of $33.77. The company will report its quarterly numbers February 25, 2016.

Wall Street expects earnings of 8 cents a share on revenue of $202.97 million for the fourth quarter, and earnings of 15 cents a share on revenue of $650.84 million for the full year.

Tepid macroeconomic conditions have slowed down customer spending, and Tableau’s slower license revenue growth in a stronger quarter for software sales reinstates this fact.

In addition, heavy weights such as Microsoft and Amazon have similar products at cheaper rates put more pressure on companies like Tableau and Splunk.