Tableau Software, Inc.’s (NYSE:DATA): Tableau Software, Inc., together with its subsidiaries, provides business analytics software products. The US$11b market-cap company announced a latest loss of -US$77.0m on 31 December 2018 for its most recent financial year result. The most pressing concern for investors is DATA’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for DATA, its year of breakeven and its implied growth rate.
According to the 26 industry analysts covering DATA, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$39m in 2021. DATA is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, I calculated the rate at which DATA must grow year-on-year. It turns out an average annual growth rate of 18% is expected, which seems realistic. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for DATA given that this is a high-level summary, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. DATA currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. This means that DATA has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
There are key fundamentals of DATA which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at DATA, take a look at DATA’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should further research:
- 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.
- 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.
- 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.
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