What to Expect From Tableau Software (DATA) in Q2 Earnings?

Tableau Software Inc. DATA is slated to release second-quarter 2018 results on Aug 2. The company beat the Zacks Consensus Estimate in two of the trailing four quarters, delivering an average positive surprise of 145.83%.

In the last reported quarter, the company posted non-GAAP loss of 19 cents per share, wider than the Zacks Consensus Estimate of a loss of 18 cents per share. The figure was much wider than the year-ago loss figure of 3 cents.

Revenues of $246 million surpassed the Zacks Consensus Estimate of $218 million and surged 23% from the year-ago quarter.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Tableau Software is expected to keep on benefiting from increasing demand for business analytics tools in the global market. Notably, the company acquired Empirical Systems, an MIT spun off Artificial Intelligence (AI) startup in June 2018.

With the help of Empirical’s AI and Machine learning tools, users can gain deeper insight into their data by testing various conditions automatically. Tableau Software is anticipated to expand its customer base with this recent acquisition. The company added 3,900 new customer accounts in first-quarter 2018.

The company’s transition to a subscription-based model is a positive. Robust customer growth in the company’s commercial and international businesses is driving results. The company sealed a deal with one of the largest financial services firms in the United States in the last reported quarter.

However, the model transition will be a drag on the company’s billings and license bookings. Saturation in the company’s domestic market (United States and Canada), which accounts for the majority of its revenues is also a concern.

Additionally, the company also faces intensifying competition from Microsoft’s MSFT Power BI and other new as well as established players. Increase in headcount has increased expenses, putting margins under pressure.

Tableau Software, Inc. Price and EPS Surprise

Tableau Software, Inc. Price and EPS Surprise | Tableau Software, Inc. Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tableau Software has a Zacks Rank #3 and its Earnings ESP is -9.33%. Therefore, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Vishay Intertechnology  VSH has an Earnings ESP of +2.41% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Science Applications International Corp. SAIC has an Earnings ESP of +1.70% and a Zacks Rank #1.

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