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Q2 Earnings Outperformers: Salesforce (NYSE:CRM) And The Rest Of The Sales Software Stocks


Jabin Bastian /
2021/10/12 6:43 am EDT
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As sales software stocks’ Q2 earnings season wraps, let's dig into this quarters’ best and worst performers, including Salesforce (NYSE:CRM) and its peers.

Companies need to be able to contact their customers and sell to them as efficiently as possible, and that together with the ongoing migration to cloud drives demand for cloud-based CRM solutions that integrate data analytics with sales and marketing functions.

The 4 sales software stocks we track reported a a solid Q2; on average, revenues beat analyst consensus estimates by 3.21%, while on average next quarter revenue guidance was 2.61% above consensus. The market rewarded the results with the average return the day after earnings coming in at 1.05%.

Salesforce (NYSE:CRM)

Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce is a software as a service platform that helps companies access, manage and share sales information.

Salesforce reported revenues of $6.34 billion, up 23% year on year, beating analyst expectations by 1.51%. It was a decent quarter for the company, with a strong sales guidance for the next quarter.

“With companies and governments around the world continuing to accelerate their digital transformations, we delivered our fifth phenomenal quarter in a row,” said Marc Benioff, Chair & CEO, Salesforce.

Salesforce Total Revenue

Salesforce delivered the slowest revenue growth of the whole group. The stock is up 4.65% since the results and currently trades at $273.57.

Is now the time to buy Salesforce? Access our full analysis of the earnings results here, it's free.

Best Q2: ZoomInfo (NASDAQ:ZI)

Founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.

ZoomInfo reported revenues of $174 million, up 56.8% year on year, beating analyst expectations by 7.09%. It was an impressive quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.

ZoomInfo Total Revenue

ZoomInfo scored the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The company added 150 enterprise customers paying more than $100,000 annually to a total of 1,100. The stock is up 14.4% since the results and currently trades at $62.65.

Is now the time to buy ZoomInfo? Access our full analysis of the earnings results here, it's free.

Weakest Q2: Zendesk (NYSE:ZEN)

Founded in 2006 by three Danish friends who got tired of implementing complex old-school solutions, Zendesk is a software as a service platform that makes it easier for companies to provide help and support to their customers.

Zendesk reported revenues of $318.2 million, up 29% year on year, missing analyst expectations by 0.72%. It was a weaker quarter for the company, with a miss of the top line analyst estimates and an underwhelming revenue guidance for the next quarter.

Zendesk had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 27.5% since the results and currently trades at $109.

Read our full analysis of Zendesk's results here.

HubSpot (NYSE:HUBS)

Started in 2006 by two MIT grad students, HubSpot is a software as a service platform that helps small and medium-size businesses sell, market themselves, and get found on the internet.

HubSpot reported revenues of $310.7 million, up 52.6% year on year, beating analyst expectations by 4.99%. It was a solid quarter for the company, with an exceptional revenue growth.

The stock is up 15.3% since the results and currently trades at $680.67.

Read our full, actionable report on HubSpot here, it's free.

The author has no position in any of the stocks mentioned