Developments Helping Push-Up The Salesforce
Salesforce earnings report an announcement was made that the
launch of the world’s largest software event, Dreamforce, was happening. The
event will take place both in-person and digitally from September 21 – 23, 2021
across a global campus, including San Francisco, New York City, London, and
Paris, among other cities.
CEO Marc Benioff commented, “We believe
our Customer 360 platform is proving to be the most relevant technology for
companies accelerating out of the pandemic. With incredible momentum throughout
our core business, we’re raising our revenue guidance for this fiscal year by $250 million to approximately $26
billion and non-GAAP operating margin to 18 percent. We’re on our path to reach
$50 billion in revenue in FY26.”
is in the process of buying Slack Technologies Inc. for $27.7 billion, an
acquisition designed to fuel sales growth of more than 25% a year. The deal is
part of Chief Executive Officer Marc Benioff’s effort to expand his company’s
importance to a wide swath of corporate employees beyond the marketers and
account representatives who use Salesforce apps to manage customers.
Forward After A Great Salesforce Earnings Report.....
These solid results prompted Salesforce to boost its revenue and cash
flow forecast. Based on Salesforce earnings report results, the company
initiated guidance for the second quarter. Management expects Q2 2022 EPS in
the range of $0.91 – $0.92, versus the consensus estimate of $0.85.
Second-quarter revenues are expected to range between $6.22 billion and $6.23
billion, versus the consensus estimate of $6.15 billion.
For the Fiscal Year 2022, Salesforce projects adjusted EPS in the range
of $3.79 – $3.81 and revenues to range between $25.9 billion and $26.0 billion.
now expects sales to rise roughly 22%, while operating cash flow grows as much
"With incredible momentum
throughout our core business, we're raising our revenue guidance for this
fiscal year by $250 million to approximately $26 billion and non-GAAP
[adjusted] operating margin to 18%," CEO Marc Benioff said. "We're on our path to reach $50 billion in revenue in FY26."
After The Salesforce Earnings Report.....
Following the quarterly results announcement, Oppenheimer analyst Brian
Schwartz maintained a Buy rating and a price target of $265 (11% upside
potential) on the stock.
Schwartz said, “CRPO, which we
view as the best leading indicator, accelerated to 32% growth in F1Q, and
combined with the higher outlook implies results across the four clouds
well-ahead of expectations too.”
The analyst further added, “Salesforce
is generating a record number of big deals and magnitude of upside for the backlog
and billings this quarter, which can support long-term growth. We believe the
recovery and strength in the customer software market this year is driving a
material benefit to the company’s bookings. On balance, the F2Q CRPO guidance
implies a decel from this quarter, but could prove conservative given the
strength in the end-market demand and execution.”
wrote in a note to clients before the results were announced, citing its
surveys of Salesforce partners. With many companies expecting at least some of
their workers to remain remote and tasks like sales calls to continue over
teleconference, Salesforce clients are speeding up a move to modernize
software, Chief Operating Officer Bret Taylor said in an interview. Meanwhile
acquired products from the 2019 purchase of Tableau and 2018 takeover of
MuleSoft were key parts of Salesforce’s biggest deals in the quarter.
“We’re seeing very, very healthy
said. “You see it in our numbers,
unambiguously.” Tableau figured into eight of the 10 biggest deals and
MuleSoft was part of half of them, he said.
Overall, the stock has a Strong Buy consensus rating based on 18 Buys
and 3 Holds. The average analyst price target of $279.25 implies 16.5% upside
potential from current levels.