It expected a soft 2016 in both revenue and profits and the stock price got murdered. The company's stock lost about half its value in one day.
On Tuesday at the Goldman Sachs Technology conference in San Francisco, Tableau CFO Tom Walker was asked to explain what the company plans to do to stop the share-price plunge, such as a stock buyback. Analysts have also been pressuring Tableau to focus more on profits rather than investing in growth.
His answer, in a word: nothing.
Tableau now has 39,000 customers, 18,000 of them outside the US, and said it's still going to invest in more products for them, as well as building out its international offices and sales forces.
Here's what he said:
A stock buyback is not something that we're announcing today. It is something that we would consider. This just happened over the last couple of days.
We think the company is well positioned to deliver on a huge market of analytics, even in a rough patch. And we think 2016 will be a rough patch of spending in IT, it is something that we will continue to invest in.
If you go back to 2008, when the company was considerably a lot smaller, we slowed everything down in 2009, including the development efforts. And that was the wrong thing to do because [if we didn't slow down] we could have accelerated our growth coming out of that. So in good times and bad we want to be prudent at how we look at this from a long-term perspective.
To recap: shares went from $81.75 with analysts predicting target prices of $100 and above, to below $40 on Tuesday, with average analyst targets of $74.
For instance, Morgan Stanley analysts who had been bullish on Tableau did a complete about-face. They downgraded the stock from overweight to equal-weight and slashed their target price from $125 to $55.
All this because Tableau lowered its earnings expectations to $830 million to $850 million from its previous guidance of $845 million to $865 million.
Plus, although the company did beat its fourth quarter earnings expectations, the beat was way softer than usual - just 1% over revenue expectations, compared to beating 7% to 17% in each of the last 6 quarters, notes Deutsche Bank's Karl Keirstead.
Not buying it
Walker also reiterated something Tableau said on the earnings call: IT companies just don't seem to planning on spending as much in 2016.
Investors in the space seem to share these concerns. Yesterday there was a big sell-off in other software-as-a-service companies, including Box, Zendesk, Workday, even the cloud granddaddy, Salesforce.
But some analysts are not buying the explanation that the whole software market is growing soft.
They think Tableau's problem is two things: Increased competition, notably from Microsoft. And problems with Tableau's own execution.
"We are not seeing across-the-board macro-related weakness in the software sector, certainly nothing that would explain Tableau's marked deceleration from 65% growth in 3Q15 to expected 27% growth in 1Q16," Deutsche Bank analyst analyst Keirstead says.
He suggest that Tableau is facing more competition (driving down prices), internal sales issues and, perhaps the fact that some companies are focused more on moving their IT to the cloud than they are in ramping up their big data projects.
Microsoft
Microsoft Power BI competes with Tableau.
Daniel Ives, an analyst at FBR has a more kind view of Tableau's situation, the company is going through "a painful transition from hyper-growth to a more normalized growth path" and investors just have to reset their expectations.