Why Tableau Software Inc Will Keep Flying in 2014

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Tableau Software (NYSE: DATA  ) climbed 1% this morning after Goldman Sachs upgraded the business analytics software company from neutral to buy.

So what: Along with the upgrade, analyst Greg Dunham boosted his price target to $92 (from $77), representing about 22% worth of upside to yesterday's close. While contrarians might be turned off by Tableau's strong share price appreciation in recent weeks, Dunham believes there's plenty of room to run given his view of accelerated contract wins going forward.

Now what: According to Goldman, Tableau's risk/reward trade-off is particularly attractive at this point. "We expect DATA shares to outperform our broader coverage group as we believe growth will remain more elevated than consensus estimates for the coming quarters," noted Dunham. "Investor sentiment around growth sustainability and competitive differentiation should be further strengthened by the company's ability to land customers, leverage its hybrid data architecture to new Big Data platforms, and win an increasing number of larger deals." With the stock up about 75% from its 52-week lows and trading at a lofty price-to-sales of 23, however, conservative Fools might want to wait for a wider margin of safety before betting on it.

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