Salesforce.com, inc. CRM has inked a definitive agreement to acquire Tableau Software Inc DATA.
Tableau's revenue could triple to exceed $3 billion by 2023 given the massive data modernization opportunity it faces, according to KeyBanc Capital Markets.
The Analyst
Brent Bracelin maintained an Overweight rating on salesforece.com with an unchanged $180 price target.
The Thesis
As more enterprises shift their core backend data stores to the cloud, there will be growing demand to modernize reporting tools and business intelligence applications, Bracelin said in a Thursday note. (See his track record here.)
Data modernization is estimated to be a $41-billion market, representing an untapped opportunity of $15 billion for modern self-service BI and visualization tools like Tableau, the analyst said.
KeyBanc expects Tableau's revenue to nearly triple from an estimated $1.15 billion in 2018 to cross $3 billion in 2023, provided the company can sustain an annual growth rate of 23% on the back of demand for data modernization and its transition to a subscription model.
This estimate does not include potential upside from cross-selling to Salesforce’s over 150,000 customers, broader channel distribution and other product synergies, Bracelin said. Tableau could generate more than $1 billion in operating cash flows by 2023, he said.
The Tableau deal could add incremental revenue of $400 million in 2020, $1.3 billion in 2021 and $2 billion in 2022, the analyst said
Bracelin recommends purchasing Salesforce shares ahead of the company’s investor event July 10.
Price Action
Salesforce shares were down by 0.17% at $150.45 at the time of publication Friday.
Related Links:
Tableau CEO On Synergies With Salesforce: The 'Best Of Both Worlds'
‘Fast Money' Traders Share Their Catch-Up Picks
Photo courtesy of Salesforce.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.