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Why Shares of Tableau Software Got Crushed Wednesday

By Evan Niu, CFA - Jul 29, 2015 at 1:52PM

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Is it meaningful? Or just another move?

What: Shares of data analytics visualization specialist Tableau Software (DATA) got crushed by as much as 23% today after reporting second-quarter earnings and providing full-year guidance that failed to meet lofty Street expectations. At 2:45 p.m., shares were down roughly 14%.

So what: Revenue jumped 65% to $149.9 million, while the company also continued to grow overseas with international sales increasing 83%. Tableau put up adjusted earnings per share of $0.07. Compare those top- and bottom-line results to the consensus estimates of $141 million and $0.05 per share. Tableau even increased full-year revenue guidance to $617 million to $627 million, up from the previous range of $600 million to $610 million, but it still wasn't enough to satisfy investors.

Now what: On average, analysts were expecting Tableau to generate nearly $620 million in revenue for the full year and post adjusted earnings per share of $0.40. Those expectations may be a bit lofty relative to Tableau's forecast, as well as the fact that the company has only put up adjusted earnings per share of $0.15 in the first half of the year. While Tableau's business is seasonally backloaded, investors may still be asking for too much. Objectively, Tableau had a strong quarter, adding over 3,000 customer accounts and closing over 230 deals valued at over $100,000 each. But keep in mind that Tableau is very much priced for growth so any missteps will be badly punished.

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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