Analysts Have Conflicting Sentiments on These Technology Companies: Tableau Software (NYSE: DATA), The Rubicon Project (NYSE: RUBI) and New Relic Inc. (NYSE: NEWR)

By George MacDonald

Companies in the Technology sector have received a lot of coverage today as analysts weigh in on Tableau Software (NYSE: DATA), The Rubicon Project (NYSE: RUBI) and New Relic Inc. (NYSE: NEWR).

Tableau Software (NYSE: DATA)

Brean Capital analyst Yun Kim reiterated a Hold rating on Tableau (NYSE: DATA) yesterday. The company’s shares closed yesterday at $53.20.

Kim observed, “DATA posted overall solid F2Q license revenue, driven by a rebound in its large deal activity. This represents the first sign of stability in its business since the disappointing performance two quarters ago (Q4). However, we believe it’s prudent to wait at least one more quarter for solid execution around large deals to better assess whether its sales organization can execute its new large deal framework on a consistent basis. We are uncertain whether this new deal framework is simply a formal discount plan around larger expansion deals or a revamped sales approach to more effectively monetize larger enterprise-wide deployment opportunities, including ELAs (enterprise license agreements). Hence, we are uncertain regarding the sustainability of its large deal execution and also wary of potential sales transition risks related to improving large deal execution, which typically takes several quarters to achieve. In addition, we note that the company has yet to appoint the newly created President/head of sales position. Our/Street’s license revenue, total revenue, margin and EPS estimates are lowered due to higher mix of ratable license business, which we don’t believe will be much of an issue for most investors.”

According to TipRanks.com, Kim is a 4-star analyst with an average return of 10.0% and a 62.0% success rate. Kim covers the Technology sector, focusing on stocks such as Manhattan Associates, Microstrategy Inc., and Qlik Technologies.

Currently, the analyst consensus on Tableau is Moderate Buy and the average price target is $61.85, representing a 16.3% upside.

In a report issued on July 25, Deutsche Bank also downgraded the stock to Hold with a $65 price target.
The Rubicon Project (NYSE: RUBI)

RBC Capital analyst Andrew Bruckner reiterated a Hold rating on Rubicon Project (NYSE: RUBI) on August 2 and set a price target of $14. The company’s shares closed yesterday at $9.20, close to its 52-week low of $9.

According to TipRanks.com, Bruckner is ranked #1945 out of 4085 analysts.

Currently, the analyst consensus on Rubicon Project is Hold and the average price target is $19, representing a 106.5% upside.

In a report issued on August 2, Oppenheimer also downgraded the stock to Hold.
New Relic Inc. (NYSE: NEWR)

J.P. Morgan analyst Sterling Auty reiterated a Buy rating on New Relic Inc (NYSE: NEWR) on August 2 and set a price target of $50. The company’s shares closed yesterday at $33.93.

Auty said, “NEWR posted another solid quarter with 53.6% top-line growth, margins coming in ~360bps ahead of street consensus and third straight quarter with positive operating cash flow. Management plans to introduce cloud pricing model option that we believe will help the company drive upsells within the existing customer base and expand to new customers.”

According to TipRanks.com, Auty is a 5-star analyst with an average return of 7.7% and a 64.7% success rate. Auty covers the Technology sector, focusing on stocks such as SS&C Technologies Holdings, CSG Systems International, and Synchronoss Technologies.

Currently, the analyst consensus on New Relic Inc is Strong Buy and the average price target is $38.67, representing a 14.0% upside.

In a report issued on August 2, Oppenheimer also reiterated a Buy rating on the stock with a $40 price target.