Tag Archives: crm

Tableau Might Prove Canary In Coal Mine For Broad Software Sector

Well, which canary is it? After Big Data analytics software maker Tableau Software ( DATA ) disappointed investors with Q1 and 2016 guidance  well below Wall Street expectations  — sending its stock crashing 49.5% Friday to an all-time low — Summit Research analyst Srini Nandury questioned whether Tableau “will prove to be the proverbial canary in the coal mine.” Nandury was referring to Tableau and prospects for its growth. But later Friday, in a research report, Robert W. Baird analyst Steven Ashley posed the identical question: “We wonder if Tableau will prove to be the proverbial canary in the coal mine.” Ashley’s canary was much bigger. “With among the smallest deal sizes and shortest sales cycles in enterprise software, Tableau theoretically would be the first to see any downturn in new pipeline business due to a macro weakness,” Ashley wrote, questioning whether other enterprise software vendors might follow. Investors got the point. Tableau rivals Splunk ( SPLK ) and  Qlik Technologies ( QLIK ) fell 23% and 15%, respectively, and little Hortonworks ( HDP ) — which may have been Big Data’s first canary with a 37% gap down Jan. 19 after a poor earnings report — fell 17%, also hitting an all-time low. Hortonworks The First Canary? Closing Friday at 8.48, Hortonworks is not only below its December 2014 initial public offering price of 16, but is also below the 9.50-a-share price Goldman Sachs set Tuesday for an 8.425 million-share secondary offering. Hortonworks’ Jan. 19 dive came after it filed with the SEC to raise $100 million in the secondary offering, coming after the worst opening two weeks of any year in the market’s history. On Tuesday, Hortonworks said in its new SEC filing that it had  raised only $77.19 million, before expenses. Evercore ISI analyst Bill Whyman told IBD on Friday, however, that he stands by his research issued Jan. 26, in which he acknowledged tech companies face continuing “weak” demand, but not so weak that stocks should be “falling off a cliff” like they have so far this year. “The harder question is: Are stocks anticipating that demand will fall off a cliff six months from now?” Whyman said. “The evidence to date does not make this our base case.” He expects 6% global tech revenue growth for 2016 vs. 2% in 2015, and offered a mixed bag when looking at sectors. He advises overweighting portfolios with software and Internet stocks, underweighting communications equipment and computing, and market-weighting (neither buying nor selling) semiconductor stocks. “We forecast ‘not-pretty-but-we’ll-take-it’ overall,” he said. Late Friday, however, his Evercore ISI colleague Kirk Materne, sang a tougher mine-canary tune, “as software officially enters the pain cave.” “If you wanted a cathartic event to wipe out any remaining optimism in the software space, (Tableau’s) earnings report was it,” Materne wrote in a research note. “Ironically, the idea that a license-based, visualization tool vendor (Tableau) that is facing growing pains would cause a 10% pullback in Adobe ( ADBE ) or 14% pullback in CRM ( Salesforce.com ( CRM )) would seem like a stretch, but welcome to the new reality. “While most of the major ‘blow-ups’ year-to-date in software have been more company specific (at least in my view) vs. a dramatic change in the fundamental backdrop, the reality is no one cares, and the broader de-risking in the sector is unlikely to end until we see a strong quarter from one of the higher-quality growth names like CRM or Palo Alto Networks ( PANW ) (and the stock actually goes up) and/or until some of the smaller names throw in the towel and M&A picks up.” Palo Alto Networks stock fell 12% Friday, part of the general downturn. Database leader  Oracle ( ORCL ), which is still trying to accelerate its cloud business, fell 1.9% Friday, in line with Friday’s broader market decline. IBD’s entire Computer Software-Database industry group fell 15%. Other big names in the enterprise software market tumbling Friday included  SAP ( SAP ) (down 3.6%), Salesforce.com (13%), Workday ( WDAY ) (16%) and Manhattan Associates ( MANH ) (9%). IBD’s Computer Software-Enterprise group fell 8% Friday to a 2-1/2-year low. Qlik, CyberArk Software ( CYBR ), FireEye ( FEYE ) and Hortonworks are all scheduled to report earnings in the coming week, with the pressure on.

Tableau Tumbles On Microsoft Rivalry; Software Stocks Down Hard

Tableau Software ( DATA ) stock lost nearly half its value Friday, as investors reacted to weak first-quarter guidance late Thursday and the rise of Microsoft — and possibly Amazon.com — as a top rival in analytics, while enterprise software spending overall seems to be easing. Microsoft ‘s ( MSFT ) new PowerBI data-analytics software product, irresistibly priced for free against Tableau’s premium-priced product, won’t necessarily affect only Tableau’s campaign. Rival Workday ( WDAY ) stock was down 14% and Salesforce.com ( CRM ) was down 12% in midday trade in the stock market today . Security software stalwart  Palo Alto Networks ( PANW ) stock was down 11%. Tableau stock, though, was down 49% as its outlook for this quarter and the full year lagged far below Wall Street expectations. Wall Street analysts, who were mostly upbeat about Tableau a day earlier, raced to downgrade ratings or reduce price targets. “Tableau reported revenue that beat consensus by only 1% (lowest ever), or about $2 million, when the average beat over last 11 quarters is around $11 million,” Summit Research analyst Srini Nandury said in a research note. Summit slashed its price target on Tableau stock to 45 from 80, and maintained a hold rating. “Given that the company pulled down guidance for 2016, we believe Tableau is in the penalty box for the foreseeable future,” Nadury said. “We remain on the sidelines given our belief that 1) comps will get tougher from these levels; 2) competition continues to materialize” with Qlik Technologies ( QLIK ), MicroStrategy ( MSTR ), Salesforce.com, Amazon.com ( AMZN ) and Microsoft “all gunning for a piece of the action; 3) the market may not be as big as some on the Street believe as most Excel users (as Tableau targets) would never need a visualization function; and, 4) low-hanging fruit already has been picked.” Tableau said it added more than 1,000 employees, many of them in sales, in 2015 and now has a total workforce of 3,000-plus. But Kelly Wright, executive vice president of sales, is leaving by year’s end. Responding to an analysts’ question, on the company’s earnings conference call, about her departure amid the sales force buildup, management downplayed the transition. When her retirement was announced in January, CEO Christian Chabot said, “Kelly has provided the sales leadership we needed and built a world-class sales team.” She was Tableau’s first salesperson in 2005. Business-intelligence software maker Splunk ( SPLK ) was down 25% midday Friday, while Qlik was down 15. Microsoft stock was down 2%.      

Manhattan Associates Slips Despite Q4 Earnings, 2016 Guidance Beat

Maker of supply-chain management software Manhattan Associates ( MANH ) on late Tuesday posted Q4 earnings that beat expectations. Fourth-quarter earnings rose 32% to 39 cents a share minus items, beating Wall Street analysts by 4 cents, on revenue up 8% to $141.4 million, or $100,000 better than Wall Street. It also guided 2016 beyond Wall Street expectations. Still, Manhattan Associates stock seesawed Wednesday and was flat in late-afternoon trading in the stock market today , near 55. Shares touched a record high 77.75 on Dec. 7. Analysts, though, were mostly upbeat. “Manhattan closed 2015 strong,” said William Blair analyst Matthew Pfau in a research note Wednesday. The company’s enterprise platform lets a warehouse manager 100 miles away see which Harry’s Apothecary goods are flying off the shelves and lets Harry know what’s stacking up at the warehouse, helping him prepare for the next sale. The visualization can extend from the checkout counter to the manufacturer’s parts supplier. With a market value of $3.77 billion, Manhattan is the eighth largest member of IBD’s Computer Software-Enterprise industry group. It earns an IBD Composite Rating of 87, meaning its stock is outperforming 87% of all S&P 500 companies, and ranks higher than most larger rivals, including SAP ( SAP ), Salesforce.com ( CRM ), ADP ( ADP ), Workday ( WDAY ), ServiceNow ( NOW ) and NetSuite ( N ). Only Ultimate Software ( ULTI, ) with a 98 CR, is bigger and performing better. The stock of the largest, SAP, with a market cap of $94 billion, spent most of the morning down before rising up a fraction Wednesday afternoon. Ultimate Software stock was up 6%, after that company also beat earnings expectations late Tuesday. “Although the retail environment remains challenging, Manhattan has not seen a material change in IT purchasing trends from retailers and the pipeline is still strong,” Pfau said. “However, we believe that management’s guidance takes into account a cautious retail IT spending environment for 2016.” While consumer spending makes retailers cautious, Manhattan’s supply-chain tools are intended to make the shopkeepers more cost-efficient. “Demand for our omni-channel, store and distribution management solutions continues to be strong and we’re working hard to extend our market leadership position,” Manhattan Associates CEO Eddie Capel said in the company’s earnings release.  “Despite persistent global macro sluggishness, we are optimistic about our growth opportunities in 2016. We will continue to be a serial investor in innovation. . . .” For the year, Manhattan expects adjusted EPS to rise 11%-13% at $1.69-$1.72 per share, on revenue up 9%-10.5% to $609 million to $615 million, or $612 million at the midpoint. Analysts polled by Thomson Reuters have modeled $1.66 and $611.6 million.