A Closer Look At Our Price Estimate For Tableau

by Trefis Team
-14.53%
Downside
163
Market
139
Trefis
DATA
Tableau Software
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Tableau Software (NYSE:DATA) has seen impressive growth in recent years. Revenue grew 6% while the stock price jumped 45% in 2017. However, the company’s operating income has continued to follow a downward trajectory, which is primarily attributed to the company’s continued efforts in expanding its international reach and higher spending on research and development. Reduced upfront costs across product lines due to the introduction of subscription-based licensing, and the expectation of increased adoption of its products going forward, suggests an improved growth outlook. Additionally, the company’s efforts in keeping a check on expenses should help it boost its margins.

Currently, we have a price estimate of $66 for Tableau, which is below the current market price. We have also created an interactive dashboard which shows the forecast trends; you can modify the key value drivers to see how they impact the company’s revenues and bottom-line.

International expansion and product innovation should drive License Revenues

With the introduction of a cost-effective subscription-based pricing, growth in Maintenance Revenues will continue at a slower rate

We expect revenue growth at 14% in 2018; Increased demand for Business Intelligence tools, cloud-enabled solutions and shift from perpetual To subscription-based licensing to drive growth

We expect expenses to grow in absolute terms, but revenue expansion will drive EBITDA

We have used a Price/Sales Ratio of 5 for our valuation estimate, but you can modify the multiple in order to come up with your own valuation estimate for the company.

 

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