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%.