Analytics and data visualization software company, Tableau Software, Inc. (DATA) is set to release the third-quarter 2014 earnings on Nov 5, 2014.
Last quarter, the company delivered an earnings surprise of 12.50%. The company has delivered positive earnings surprises in the last four quarters, with an average beat of 138.72%. Let’s see how things are shaping up for this announcement.
Factors Influencing This Quarter
Given a rapid growth in demand for business analytics tools, we believe Tableau Software’s long-term growth prospects remain encouraging. The company caters to various organizations, including small and medium-sized businesses, government agencies, Fortune 500 corporations, research institutions and non-profits organization and boasts more than 21,000 customer accounts across 100 countries.
The company currently targets growth in the international market, as is evident from the fact that a substantial part of its revenues is generated from business outside the U.S. and Canada.
However, increase in operating expenses due to higher research and development, and general and administrative expenses associated with the expansion undertaken by the company pose a near-term drag on the margins. Further, competition from giant players such as IBM Corporation (IBM) and Oracle Corporation (ORCL) pose a significant threat.
Earnings Whispers?
Our proven model does not conclusively show that Tableau Software is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below
Zacks ESP: Tableau Software has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate stand at 12 cents loss per share.
Zacks Rank: Tableau Software’s Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
A company in the same sector that you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter is Invensense Inc. (INVN), with an Earnings ESP of +4.35% and a Zacks Rank #2 (Buy).
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