What: Shares of Tableau Software (NYSE:DATA) fell 43.1% in February, according to S&P Global Market Intelligence. The stock fell off a cliff after presenting a disappointing earnings report with a side of timid guidance. Tableau investors saw a 48% rout the next day, and the shares never recovered.
So what: Tableau exceeded Wall Street's average estimates on both the top and bottom lines in the fateful fourth-quarter report. But first-quarter guidance came in well below the consensus targets at the time. Moreover, the business mix within Tableau's seemingly solid results looked like a big, red warning flag -- customers may be signing up for plenty of service contracts, but the far more profitable software licenses are not drawing a crowd.
Now what: To get a hint at what the license softness means, take a look at some of Tableau's closest rivals. Qlik (NASDAQ:QLIK) and Splunk (NASDAQ:SPLK) saw their share prices dragged down by Tableau's bad news, falling 21% and 32%, respectively, over the next two days.
But then, Splunk and Qlick reported their own results for the comparable quarter, and didn't show any signs of Tableau's weak licensing trend. Qlik's license sales kept up with the company's overall revenue growth, and Splunk simply crushed expectations overall.
Both of their stocks nearly recovered from the early Tableau-powered drop, each ending February less than 10% lower.
In other words, Tableau's fourth-quarter issues were Tableau's own. The rest of the data analysis sector is chugging along just fine. One might surmise that Splunk and Qlik are stealing orders and customers from Tableau, or at least holding up much better to challenges from larger IT companies.
Tableau showed its risky colors in February. The stock could bounce back, but there's no real reason why it shouldn't keep falling. Neither a buyer nor a short-seller be -- it's safer to simply keep your hand off this explosive stock.