Tableau rises as analysts push back on competitive concerns

Shares of Tableau Software (DATA) traded higher Wednesday after Wall Street analysts downplayed fears of unmanageable competition in the business intelligence space. UBS PUSHES BACK ON COMPETITIVE FEARS: UBS analyst Fatima Boolani reveals that the firm's analysis of Tableau's competitive threats in the business intelligence space -- using Google search trends as a proxy measurement -- suggests competition is "less dramatic" than feared. Specifically, Boolani's analytics suggest Tableau remains a "clear leader" in search activity across eight markets and against 11 peers; an apparent rise in Microsoft's (MSFT) BI offering is more a net negative for others than a call for caution on Tableau; and "noise-making" traditional vendors and fresh entrants are not generating correspondingly high search activity. Combined with a tightening capital market for startups, the news leads Boolani to believe that competitive intensity has "at least moderated," which should help ease pressure on upcoming sales cycles. Also highlighting that tomorrow's analyst day should "buoy" sentiment even if it can't move the stock, the analyst thinks the above-mentioned competitive environment, the growing shift to recurring revenue, and "concerted" cost discipline merits a higher multiple for Tableau, leading Boolani to reiterate a Buy rating and lift her target to $68 from $60. BERNSTEIN NAMES TABLEAU TOP PICK IN MARKET: As part of a wider coverage initiation in small and mid-cap U.S. software, Bernstein analyst Zane Chrane names Tableau as his top Outperform on a 12-month horizon in the space, while assigning an Underperform rating to Teradata (TDC) and a Market-Perform to Red Hat (RHT). Citing Tableau's "highly attractive" risk/reward, the analyst argues it hasn't received enough credit for being the "best-of-breed" vendor in a high growth market. Chrane writes that his proprietary analysis "points to underappreciated competitive strength of Tableau's products and strong purchase intent by CIOs. We expect an accelerating subscription transition and improving execution under the new CEO to lead to upward revisions to revenue estimates and consequently to multiple expansion." PRICE ACTION: Shares of Tableau are up 2.3% to $61.58 in afternoon trading, while Teradata has slipped 2%.