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Factors Setting the Tone for Salesforce's (CRM) Q1 Earnings
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Salesforce (CRM - Free Report) is slated to release first-quarter fiscal 2022 results on May 27.
For the fiscal first quarter, the company projects total revenues to be between $5.875 billion and $5.885 billion. Moreover, non-GAAP earnings are expected between 88 cents and 89 cents per share.
The Zacks Consensus Estimate for revenues is pegged at $5.88 billion, indicating an increase of 20.9% from the year-ago quarter reported figure.
The consensus mark for earnings has remained unrevised at 88 cents per share for the past 30 days. The bottom line is expected to increase 25.7% year on year.
Notably, Salesforce’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 72.6%.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Salesforce’s quarterly performance is likely to have benefited from the robust demand environment as customers have been undergoing a major digital transformation. The company’s ability to provide integrated solutions for customers’ business problems is expected to have been a key growth driver.
Growth across its four major cloud service offerings, Sales Cloud, Service Cloud, Platform and other plus Marketing & Commerce Cloud is expected to have boosted Salesforce’s subscription and supported its revenue stream, which is a major catalyst.
The company’s performance is also likely to have gained from its firm focus on building and expanding relationships with leading brands across industries and geographies. In addition, significant growth opportunities in the public sector are likely to have been a tailwind during the quarter under review.
Additionally, the acquisitions of Tableau and Vlocity are anticipated to have significantly aided the company’s top-line growth during the quarter to be reported.
Nonetheless, decline in software spending by small & medium businesses (SMBs) due to the coronavirus outbreak might have affected the company’s fiscal first-quarter performance.
Further, stiff competition from Oracle and Microsoft is a concern in addition to forex headwinds. Increasing investment in international expansions and data centers might have eroded the company’s profitability during the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Salesforce this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Salesforce has an Earnings ESP of 0.00% and currently carries a Zacks Rank of 3.
Stocks With the Favorable Combination
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Pure Storage, Inc. (PSTG - Free Report) has an Earnings ESP of +10.81% and currently carries a Zacks Rank of 3.
Nutanix Inc. (NTNX - Free Report) has an Earnings ESP of +1.76% and carries a Zacks Rank #3, at present.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Factors Setting the Tone for Salesforce's (CRM) Q1 Earnings
Salesforce (CRM - Free Report) is slated to release first-quarter fiscal 2022 results on May 27.
For the fiscal first quarter, the company projects total revenues to be between $5.875 billion and $5.885 billion. Moreover, non-GAAP earnings are expected between 88 cents and 89 cents per share.
The Zacks Consensus Estimate for revenues is pegged at $5.88 billion, indicating an increase of 20.9% from the year-ago quarter reported figure.
The consensus mark for earnings has remained unrevised at 88 cents per share for the past 30 days. The bottom line is expected to increase 25.7% year on year.
Notably, Salesforce’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 72.6%.
salesforce.com, inc. Price and Consensus
salesforce.com, inc. price-consensus-chart | salesforce.com, inc. Quote
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Salesforce’s quarterly performance is likely to have benefited from the robust demand environment as customers have been undergoing a major digital transformation. The company’s ability to provide integrated solutions for customers’ business problems is expected to have been a key growth driver.
Growth across its four major cloud service offerings, Sales Cloud, Service Cloud, Platform and other plus Marketing & Commerce Cloud is expected to have boosted Salesforce’s subscription and supported its revenue stream, which is a major catalyst.
The company’s performance is also likely to have gained from its firm focus on building and expanding relationships with leading brands across industries and geographies. In addition, significant growth opportunities in the public sector are likely to have been a tailwind during the quarter under review.
Additionally, the acquisitions of Tableau and Vlocity are anticipated to have significantly aided the company’s top-line growth during the quarter to be reported.
Nonetheless, decline in software spending by small & medium businesses (SMBs) due to the coronavirus outbreak might have affected the company’s fiscal first-quarter performance.
Further, stiff competition from Oracle and Microsoft is a concern in addition to forex headwinds. Increasing investment in international expansions and data centers might have eroded the company’s profitability during the to-be-reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Salesforce this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Salesforce has an Earnings ESP of 0.00% and currently carries a Zacks Rank of 3.
Stocks With the Favorable Combination
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Digital Turbine, Inc. (APPS - Free Report) has an Earnings ESP of +6.98 and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pure Storage, Inc. (PSTG - Free Report) has an Earnings ESP of +10.81% and currently carries a Zacks Rank of 3.
Nutanix Inc. (NTNX - Free Report) has an Earnings ESP of +1.76% and carries a Zacks Rank #3, at present.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>