Salesforce Earnings: What To Look For From CRM

Radek Strnad /
2022/02/28 7:04 am EST
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Customer relationship management software maker Salesforce (NYSE:CRM) will be reporting earnings tomorrow afternoon. Here's what you need to know.

Last quarter Salesforce reported revenues of $6.86 billion, up 26.6% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a solid revenue growth but a decline in gross margin.

Is Salesforce buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Salesforce's revenue to grow 24.4% year on year to $7.24 billion, improving on the 19.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.75 per share.

Salesforce Total Revenue

The analysts covering the company have had mixed opinions about the business heading into the earnings, with revenue estimates seeing 1 upward and 2 downwards revisions over the last thirty days. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.06%.

Looking at Salesforce's peers in the sales software segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. ZoomInfo (NASDAQ:ZI) delivered top-line growth of 59.1% year on year, beating analyst estimates by 7.02% and HubSpot (NYSE:HUBS) reported revenues up 46.5% year on year, exceeding estimates by 3.29%. ZoomInfo traded down 4.28% on the results, HubSpot was up 1.97%. Read our full analysis of ZoomInfo's results here and HubSpot's results here.

Tech stocks have been facing declining investor sentiment in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 7.13% over the last month. Salesforce is down 10.5% during the same time, and is heading into the earnings with analyst price target of $316, compared to share price of $208.15.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.