Tableau Software, Inc.’s (NYSE:DATA) Profit Outlook

Tableau Software, Inc.’s (NYSE:DATA): Tableau Software, Inc., together with its subsidiaries, provides business analytics software products. The company’s loss has recently broadened since it announced a -US$77.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$119.5m, moving it further away from breakeven. As path to profitability is the topic on DATA’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for DATA, its year of breakeven and its implied growth rate.

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See our latest analysis for Tableau Software

Consensus from the 25 Software analysts is DATA is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$28m in 2021. Therefore, DATA is expected to breakeven roughly 2 years from now. What rate will DATA have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 67%, which signals high confidence from analysts. If this rate turns out to be too aggressive, DATA may become profitable much later than analysts predict.

NYSE:DATA Past and Future Earnings, May 24th 2019
NYSE:DATA Past and Future Earnings, May 24th 2019

I’m not going to go through company-specific developments for DATA given that this is a high-level summary, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. DATA has managed its capital prudently, with debt making up 26% of equity. This means that DATA has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on DATA, so if you are interested in understanding the company at a deeper level, take a look at DATA’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should further examine:

  1. Valuation: What is DATA worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether DATA is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tableau Software’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.