3 Reasons Why Oppenheimer Is Bullish On Alteryx

Data service and self-service analytics company Alteryx Inc (NYSE: AYX) is likely to benefit from the increasing quest for data, according to Oppenheimer. 

The Analyst

Analyst Ittai Kidron initiated coverage of Alteryx with an Outperform and 12-18-month price target of $48.

The Thesis

Alteryx’ self-service analytics software accelerates data analysis and transforms business-line users into citizen data scientists with very little IT involvement, Kidron said in the initiation note. (See the analyst’s track record here.) 

The bullish thesis is based on the following, the analyst said:

• Ongoing digitization efforts.
• A large total addressable market opportunity.
• Execution strength.

The company’s rising value proposition is facilitated by the efforts of enterprises to extend and accelerate their digitization processes; the efforts of companies to empower employees to enhance the quality and velocity of business decisions; and technology advancements that facilitate broader data collection, Kidron said. 

Alteryx is gaining strong exposure to the data science and modern business impact analysis segments, while also extending opportunities in AI, machine learning and data reporting and visualization, according to Oppenheimer. 

Kidron estimates Alteryx’s TAM in 2017 at $10 billion and expects it to grow to $17.5 billion by 2021, a CAGR of 15.1 percent.

Alteryx is executing successfully and investing in its “land-and-expand” model, adding customers and deepening its account penetration, the analyst said.

Oppenheimer projects upside to consensus estimates for Alteryx given the conservative net expansion outlook.

That said, Oppenheimer projects a dynamic competitive landscape, as Tableau Software Inc (NYSE: DATA)’s foray into data preparation is likely to have longer-term impact. Yet Alteryx may not face an imminent threat in light of its highly engaged customer base and no signs of changes in spending and use cases in favor of Tableau, Kidron said. 

The Price Action

Alteryx shares were down 3.65 percent to $37.22 at the time of publication Friday. 

Related Links:

Alteryx Is A Pure Play On The Democratization Of Analytics

KeyBanc Downgrades Tableau Software To Reflect ‘More Balanced’ Risk-Reward