Tableau Software (DATA), which provides software for analyzing trends and data, might not be a household name, but it certainly caught the eyes of Wall Street on Friday.
Ahead of today’s initial public offering, Tableau boosted its transaction from a range of $23 to $26 to a range of $28 to $30, and also increased the number of shares issued from 7.2 million to 8.2 million.
Tableau ended up pricing the deal at $31 to raise $254 million, then investors bid shares up as much as 60% in the first few hours of Friday trading.
So why the excitement?
Tableau is one of the leaders in a red-hot market: Big Data. Amid the surge in mobile, social networking and the cloud, companies need better tools to make sense of the subsequent deluge of information. Tableau’s software not only makes it easier to access this data, but also to put it into understandable forms, such as graphs and charts.
Think of it as Excel on steroids.
Speaking of steroids, Tableau’s growth has been almost unnaturally robust, with revenues surging from $34.2 million in 2010 to $127.7 million in 2012. The company is even profitable, with net income coming to $1.4 million last year.
As a note, Tableau is just the second Big Data company to come public. The other was Splunk(SPLK), which hit the market about a year ago and has since gone on to post a gain of 163%.
Still, despite the clearly mouth-watering possibilities, investors should approach DATA stock with caution in the short-term. It’s typical for shares to cool down after such a hot opening — as was the case with Splunk, which shed about 25% within two months of its offering before finally snapping back.