Salesforce Earnings: What To Look For From CRM

Adam Hejl /
2022/05/30 9:57 am EDT
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Customer relationship management software maker Salesforce (NYSE:CRM) will be reporting results tomorrow afternoon. Here's what to expect.

Last quarter Salesforce reported revenues of $7.32 billion, up 25.9% year on year, beating analyst revenue expectations by 1.16%. It was a decent quarter for the company, with a strong sales guidance for the next quarter.

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 23.7% year on year to $7.38 billion, in line with the 22.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.94 per share.

Salesforce Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing four downward 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 1.96%.

Looking at Salesforce's peers in the sales software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Zendesk delivered top-line growth of 30.2% year on year, beating analyst estimates by 0.96% and ZoomInfo reported revenues up 57.6% year on year, exceeding estimates by 6.03%. Both companies (Zendesk and ZoomInfo) traded flat on the results. Read our full analysis of Zendesk's results here and ZoomInfo's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 10.8% over the last month. Salesforce is down 6.99% during the same time, and is heading into the earnings with analyst price target of $273.3, compared to share price of $165.15.

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.