Tableau Software (DATA) Q1 Earnings: What's In The Cards?

Tableau Software, Inc. (NYSE:DATA) is set to release first-quarter 2017 results on May 3. Last quarter, the company delivered a positive earnings surprise of 24.32%. However, in the trailing four quarters, the company posted an average negative earnings surprise of 23.28%.

Let's see how things are shaping up for this announcement.

Factors at Play

Rising demand for business analytics tools is likely to benefit Tableau Software. The company has been seeing strength in its offerings like the hybrid data architecture platform.

The company has undertaken a number of initiatives to boost its sales productivity and align its marketing efforts to drive growth. Recently, the company introduced new subscription pricing for its products which includes Tableau Desktop, Tableau Server, and Tableau Online.

Furthermore, Grab, one of South east Asia's leading ride-hailing platform became the largest Tableau Online customer for self-service data analytics with more than 1000 users.

We note that Tableau Software has outperformed the Zacks categorized Internet Software/Services industry on a year-to-date basis. The company’s shares have increased 26.9% compared with the industry’s gain of 8.3% during the period.

For the first quarter, the company expects revenues to be around $195 million to $205 million. Non-GAAP operating loss is projected to be around $9 million to $17 million and non-GAAP loss per share is likely to be in the range of 8 to15 cents per share.

Earnings Whispers

Our proven model does not conclusively show that Tableau Software is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: Tableau Software has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 50 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Tableau Software’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are a few companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

TIM Participacoes (NYSE:TSU) with an Earnings ESP of +11.11% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avid Technology (NASDAQ:AVID) with an Earnings ESP of +160.00% and a Zacks Rank #2.

DragonWave (TO:DRWI) with an Earnings ESP of +8.82% and a Zacks Rank #2.

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