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SOM Capital Partners presentation on Tableau - part of the Skillsapien Valuations Seminar
 

SOM Capital Partners presentation on Tableau - part of the Skillsapien Valuations Seminar

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Panel presentation at the Skillsapien Valuations MasterClass: ...

Panel presentation at the Skillsapien Valuations MasterClass:
Value investment analysis on Tableau Software (NYSE: DATA)

Date: Aug 28th
Venue: NestGSV

Presented by: Shayan Mohammadi

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    SOM Capital Partners presentation on Tableau - part of the Skillsapien Valuations Seminar SOM Capital Partners presentation on Tableau - part of the Skillsapien Valuations Seminar Presentation Transcript

    • SOM Capital Partners A case Study: Tableau Software How Valuations Work – Before and After the SEC “General Solicitation” Ruling Part of A Capital-Raising & M&A Master Class on: in collaboration with: (NYSE: DATA)
    • About Us: SOM Capital Partners • Expertise in IBD valuation from value investor perspective • Decade plus experience valuing ALL type companies (from <$20M to >$300B+ in Market Cap) • Experience on deals in excess of >$13B in Enterprise Value • Over 5+ years experience as value investor and financial statement analysis • www.somcapitalpartners.com
    • TABLEAU SOFTWARE, INC. Highlights • 2 Classes of Stock: Class A (one vote per share) and Class B (ten votes per share) – Majority of Class B ‘super-voting’ shares owned by senior management and NEA (aka VC investor) – 85.7% of voting power is in NEA and senior management’s control (NOT public shareholders) • Mission Statement: “…to help people see and understand data…” • Over 13,000+ customer accounts • 81% of total revenues from USA and Canada • 19% of total revenues from International • Current Market Size: $35.1B* • Potential Market Size: $81B** * IDC market research ** Gartner Research
    • Valuation Range (‘Football Field’)
    • Relative Valuation (‘Comps’) Valuation Statistics - Tableau Software Tableau Software - Range of Valuation Multiples Tableau Software - Implied Per Share Value Range 75th Applicable 75th Pecentile Mean Median MAX Tableau Software Pecentile Mean Median MAX Methodology Name Multiple Multiple Multiple Multiple Figure Multiple Multiple Multiple Multiple Public Company Comparables: 12/31/2013 TEV / Revenue: 5.06x 4.71x 3.62x 17.60x $200.5 $16.93 $15.97 $12.97 $51.34 12/31/2014 TEV / Revenue: 3.99x 3.95x 3.38x 13.12x $271.7 $17.88 $17.75 $15.60 $51.83 12/31/2013 TEV / EBIT: 48.15x 1,060.95x 13.61x 11,386.32x $12.0 $10.94 $177.00 $5.28 $1,870.01 12/31/2014 TEV / EBIT: 33.59x 42.19x 12.61x 287.23x $16.2 $10.51 $12.42 $5.85 $66.87 12/31/2013 TEV / EBITDA: 28.64x 82.97x 11.70x 738.55x $24.5 $12.63 $30.82 $6.96 $250.26 12/31/2014 TEV / EBITDA: 21.19x 32.79x 10.68x 223.05x $33.1 $12.66 $17.92 $7.89 $104.23 12/31/2013 Pro-Forma P/E: 52.49x 43.47x 19.57x 168.31x $0.14 $7.15 $5.92 $2.67 $22.92 12/31/2014 Pro-Forma P/E: 56.61x 64.52x 19.00x 411.00x $0.18 $10.46 $11.92 $3.51 $75.91 12/31/2013 Price / Cash Flow: 47.85x 39.14x 17.97x 116.64x $24.5 $19.10 $16.18 $9.07 $42.17 12/31/2014 Price / Cash Flow: 38.10x 30.21x 15.58x 93.35x $22.5 $14.77 $12.34 $7.84 $31.78 TTM Price / BV: 10.88x 7.22x 4.62x 17.67x $200.8 $29.89 $19.83 $12.70 $48.55 Discounted Cash Flow Analysis: 4.9% Growth Rate, 17.5% Discount Rate 40.00$ 41.83 41.83 43.61$
    • Relative Valuation (‘Comps’) • Primary valuation method for IPOs are ‘comps’ – Real estate agents buy/sell your home based on ‘comps’ • Comps determine value based on peer co. metrics • Comps valuation for IPOs lead to market bubbles – I.e. ‘Tech 1.0’ market bubble (c. 1995 – 2001) • Comps can be misleading if peer co. overvalued / undervalued
    • Intrinsic Valuation (aka ‘DCF’) Tableau Software Free Cash Flow Build Up ($ in millions, fiscal year ending December 31) Mid-Year Convention Projected 2013 2014 2015 2016 2017 2018 Sales $200.5 $271.7 $349.0 $407.2 $427.0 $447.8 % growth 56.9% 35.5% 28.5% 16.7% 4.9% 4.9% EBIT $12.0 $16.2 $20.9 $24.3 $25.5 $26.8 % margin 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% Depreciation & Amortization 12.5 16.9 21.7 25.3 26.6 27.9 EBITDA $24.5 $33.1 $42.6 $49.7 $52.1 $54.6 % margin 12.2% 12.2% 12.2% 12.2% 12.2% 12.2% Taxes (4.2) (5.7) (7.3) (8.5) (8.9) (9.4) Net Operating Profit After Tax $7.8 $10.6 $13.6 $15.8 $16.6 $17.4 Plus: Depreciation & Amortization 12.5 16.9 21.7 25.3 26.6 27.9 Less: Capital Expenditures (13.4) (18.2) (23.4) (27.3) (28.6) (27.9) Less: Increase in Net Working Capital 17.7 13.3 14.4 10.8 3.7 3.9 Unlevered Free Cash Flow $24.5 $22.5 $26.3 $24.7 $18.2 $21.3 WACC Discount Period 0.5 1.5 2.5 3.5 4.5 5.5 Discount Factor 0.92 0.78 0.67 0.57 0.48 0.41 Present Value of Free Cash Flow $22.6 $17.7 $17.5 $14.0 $8.8 $8.7
    • Intrinsic Valuation (aka ‘DCF’) • Step 1: Project Free Cash Flow (‘FCF’) – Non-GAAP metric – FCFF vs. FCFE • Step 2: Calculate Terminal Value (‘TV’) – Exit Multiple Methods vs. Gordon Growth Method • Step 3: Calculate Discount Rate – Weighted Avg. Cost of Capital (‘WACC’) – CAPM and Cost of Equity
    • Concluding Remarks Re: DATA • Classic ‘growth story’ stock – Share price implies ‘supernormal growth’ – 98% of DATA total value attributable to Terminal Value • ‘Buzz’ / ‘sex appeal’ help enhance Tech co. valuation – Hotter sector = Higher Revenue Multiple = Higher EV • Entrepreneur / VC interests may NOT align perfectly w/ public shareholders – Caveat Emptor: laser focus on maximizing your ‘best interest’
    • http://skillsapien.com/sp/465-184Skillsapien Profile: Reaching Me: