Big Data is big business. More data has been generated over the past two years than in all previous history. By 2020, there will be 50 billion Internet of Things (IOT) devices generating 1.7 megabyte (MB) of new data per user every second of the day. That opportunity could reap huge rewards for shareholders of Tableau Software (NYSE: DATA).

However, that data is valuable only to the extent it can be collected and organized in a way that makes it useful to consumers. Tableau Software helps businesses do just that. All those social media tweets, pictures, and videos contain a lot of information about who you are and what you like. Your online shopping history gives merchants a good idea of what you are likely to buy in the future.

Of course, compiling all that data in a way that makes sense as business intelligence (BI) is a huge challenge. More than 1,800 terabyte (TB) of new data is being created every minute. Structured data is easy to organize, but over 90% of data is either semi-structured or unstructured. Tableau Software was one of the first companies to tackle the problem of organizing all types of data into a single user interface for businesses.

This video explains how they do it:

Before we consider what 2019 may have in store for Tableau stock, let’s take a quick look at how it has performed in the past.

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How Has Tableau Stock Performed?

Tableau stock performed quite well after its initial public offering (IPO) in May 2013. Its share price shot up 50% the day it went public. Tableau stock continued rising for the next two years, cresting above $127 in July 2015.

However, DATA quickly hit the skids seven months later. Tableau stock dropped 50% in a single day after releasing quarterly results that included cautionary guidance. Its share price has steadily recovered since then, rising back above $127 in December 2018.

What is Tableau Stock’s Long Term Stock History?

Despite its big drop three years ago, Tableau stock has nearly doubled the return of the overall stock market since its IPO in 2013. DATA has gained 150% versus 87% for the SPDR S&P 500 ETF (SPY).

How Has Tableau Stock Performed Recently?

Tableau stock performed exceptionally well in 2018, up 73.4% while SPY was down 4.6%.

Who Are Tableau’s Rivals?

Several of Tableau’s biggest rivals including Qlik, Tibco, Birst, and Sisense, are privately held. So, there is no publicly traded stock for you to buy. However, these three tech giants also compete with Tableau and have the resources to keep up with the explosive growth of big data.

Microsoft (NSDQ: MSFT)

Microsoft is the inventor of the Office suite of business software products. It only makes sense that Microsoft would extend its reach into business intelligence by offering Microsoft Power BI. Combined with its hybrid cloud business, Microsoft can seamlessly collect and store data for its customers to analyze.

Microsoft Power BI is free (up to specified data limits) and web-based, so just about anyone in the world can use it. Of course, the idea is that many of these small companies will quickly grow and upgrade to paid versions of the product.

International Business Machines (NYSE: IBM)

After purchasing Red Hat last year for $34 billion, IBM has gone all-in on cloud computing. Most of that data will be available for IBM’s “Watson Discovery” artificial intelligence technology to examine and organize for its customers.

For example, IBM’s Cognos division offers “Smart Meter” products that collect and organize energy usage data. Utility companies use it to optimize peak demand and supply to minimize outages. One utility was able to reduce overall demand for power, and its customers’ monthly bills, by 25%.

Oracle (NYSE: ORCL)

Oracle boasts that its “BI 12c” product is “stunningly visual and easy to use.” Those claims may be a subtle jab at Tableau, which is sometimes criticized for being complex and requiring extensive training to learn.

To facilitate ease of use, Oracle has added a voice control feature so users can simply ask for the data they would like to see. Instead of using a keyboard or mouse to manipulate data, verbal commands can create charts and other graphics.

Will Tableau Stock Go Up in 2019 (Should You Buy?)

The argument for owning Tableau stock is based on its incumbent position in a fast-growing sector. The amount of new data to be processed is growing very fast. Tableau’s customers would be reluctant to change vendors and risk falling behind the curve.

Tableau enjoys a solid reputation and earns high ratings for quality products and excellent service. It has a large community of active users that provide valuable feedback for product enhancements. As long as the company doesn’t give its customers a good reason to change vendors, Tableau stock should continue to perform well.

Will Tableau Stock Go Down in 2019 (Should You Sell?)

The BI market has grown to the point that it is attracting major competitors. Tableau stock has a market value of $10 billion, which is puny compared to MSFT ($820 billion), IBM ($125 billion), and ORCL ($186 billion).

Tableau has a “first-mover” advantage in the BI market and has earned strong loyalty from its customers. That will keep the company in a leadership position for years to come. However, Tableau’s market share may steadily erode as customers transition to more robust software solutions from deep-pocketed rivals.

Overall Tableau Stock Forecast and Prediction for 2019

Tableau Software is a great company with a wonderful product, but its share price has been bid up to unsustainable heights.

By any reasonable measure, Tableau stock is overvalued. At a share price of $128, DATA is valued at more than 50 times forward earnings. That’s more than three times the multiple for the overall stock market. It is priced at more than nine times sales, which is four times the index average.

Tableau stock is “priced for perfection,” and we expect it to experience a setback in 2019. As soon as there is evidence of a decline in its sales growth, we believe Tableau stock will start trading at much lower multiples.