Tableau Software (NYSE: DATA), an analytics and data visualization software company, reported a fiscal 2016 first-quarter GAAP net loss that widened from a similar period last year. Even though the revenue and earnings beat analysts’ estimates, still, the issues faced by the company largely remain unresolved. The stock, which closed at $46.39 on Monday, is expected to decline further because of the reasons stated below.
During the first quarter, the company recorded revenue of $171.7 million, up 32% from $130.1 million in the corresponding period last year. The Wall Street revenue estimate was $164 million for the first quarter.
In the first quarter, the GAAP net loss quadrupled to $45.6 million or $0.62 per share, from a net loss of $10 million or $0.14 per share in the first quarter of fiscal 2015. The non-GAAP net income of $0.4 million or break-even per share was higher than the analysts’ estimates of a net loss of $0.09 per share. However, it was considerably lower than the fiscal 2015 first-quarter earnings of $5.8 million or $0.08 per share.
Segment-wise, the first quarter licensing revenue was $96.4 million, up 14% compared to $84.4 million in the first quarter last year. The analysts view this negatively because the fourth quarter of fiscal 2015 saw a 31% growth in the licensing revenue. In this regard, the analysts’ at Pacific Crest also stated that the general budget considerations of IT clients have limited the license revenue growth of the company.
The international revenue increased 52% to $48.1 million, from $31.7 million in the year-ago similar period.
Looking forward, the company anticipates second-quarter revenue of about $193 million. For fiscal 2016, Tableau expects revenue in the range of $840 million to $845 million. The company also raised its fiscal 2016 earnings outlook to $0.51 per share, from $0.29 per share forecasted earlier. However, analysts believe that the guidance is too optimistic and hard to achieve.
The forward price to earnings of the company is 54.1, while that of the S&P 500 is only 18.1. Thus, considering the facts discussed above, we can expect the investors to shy away from the stock as of now. Till the company starts reporting predictable results, fundamentally, the share price would remain range-bound with a bearish bias.
Technically, the last known support for the stock is at 46. On Monday, the stock closed a few cents above the 50-day moving average at 46.20. The RSI is trending downward with a reading below 50. Thus, it is obvious that the share price would see a gradual decline in the days ahead.
So, to benefit from the forecasted decline in the share price, a one-touch put option contract is the suggested trade for a binary options trader. A target price of $41 or above would support the trade to end in the money. Finally, the trader should choose an expiry date in the second week of June to increase the chances of success in the trade.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
