Tableau Software Inc (DATA) Stock Falls 45% After Company Announces They Won’t Realize Benefits of Certain Tax Assets

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Shares of Tableau Software Inc (NYSE:DATA) are down over 45% in trading this morning, after announcing their fourth quarter numbers late Thursday. The report was really quite mixed, but shareholders seemingly are a bit weary of an announcement the company made in relation to certain tax assets.

GAAP net loss for the quarter came in at $41.3 million, which equates to $0.57 per share. This compares to last years fourth quarter which saw net income of $20.7 million ($0.27 per share). EPS came in at $0.33 per share, which was down from last years $0.42, and revenue came in at $201 million beating last years $143 million. However, these numbers came in ahead of analysts’ expectations of $201 million in revenue and $0.16 earnings per share.

The kicker here though, most likely causing today’s sharp share price decline, was the following announcement:

“The fourth quarter income tax expense was $34.1 million due to the recognition of a valuation allowance. We believe that it is more likely than not that the benefit from our U.S. federal and state deferred tax assets will not be realized. In recognition of this risk, we have provided a valuation allowance of $46.7 million on the deferred tax assets relating to these jurisdictions. Excluding the impact of the valuation allowance, the income tax benefit was $12.7 million for the fourth quarter primarily as a result of the permanent extension of the federal R&D tax credit.”

The stock increased 0.10% or $0.08 during the last trading session, hitting $81.83. About 705,433 shares traded hands. DATA has declined 30.12% since July 1, 2015 and is downtrending. It has underperformed the S&P500 by 22.82%.

From a total of 17 analysts covering Tableau Software (NYSE:DATA) stock, 7 rate it a “Buy”, 2 a “Sell”, and 8 a “Hold”. This means that 41% of the ratings are positive. The highest target price is $145 while the lowest target price is $70. The mean of all analyst targets is $108.20 which is 32.23% above today’s ($81.83) stock price. Tableau Software was the topic of 26 analyst reports since July 24, 2015 according to the firm StockzIntelligence Inc. Maxim Group initiated shares on February 3 with a “Sell” rating. Lake Street initiated shares with a”Hold” rating and a $85 target share price in their report from an October 19. Mitsubishi UFJ initiated DATA stock in a recent report from January 13 with a “Underweight” rating. Drexel Hamilton initiated the rating on October 9. Drexel Hamilton has a “Buy” rating and a $120 price target on shares. Finally, Goldman Sachs initiated the stock with a “Neutral” rating in a report they issued on a December 11.

The institutional sentiment increased to 1.49 in Q2 2015. It’s up 0.11, from 1.38 in 2015Q2. The ratio increased, as 60 funds sold all their Tableau Software Inc shares they owned while 68 reduced their positions. 78 funds bought stakes while 113 increased their total positions. Institutions now own 47.53 million shares which is 3.45% more than the previous share count of 45.94 million in 2015Q2.

Meritech Capital Associates Iii L.L.C. holds 26.34% of its total portfolio in Tableau Software Inc, equating to 841,646 shares. Antipodean Advisors Llc owns 1.23 million shares representing 11.14% of their total US portfolio. Moreover, Telemark Asset Management Llc has 5.86% of their total portfolio invested in the company, equating to 240,000 shares. The California-based Dorsal Capital Management Llc has a total of 4.77% of their portfolio invested in the stock. Altimeter Capital Management Lp, a Massachusetts-based fund reported 604,621 shares owned.

Tableau Software, Inc. is a well-known provider of analytics and business intelligence software solutions. The company has a market cap of $5.92 billion. The Company’s products are Tableau Desktop, a self-service analytics product, Tableau Server, a business intelligence platform for organizations, Tableau Online, a cloud version of Tableau Server, and Tableau Public, a free cloud platform for analyzing and sharing public data. It currently has negative earnings. The Company’s products are used by people across a range of organizations, including Fortune 500 firms, small and medium-sized businesses, government agencies, universities, research institutions and non-profits.