Sarah Roden

About the Author Sarah Roden

Sarah writes about stock market news for TipRanks. She graduated as member of Phi Beta Kappa from the University of Richmond in Richmond, Virginia.

Analysts Positive On salesforce.com, inc. (CRM) Following Quarterly Earnings

salesforce.com, inc. (NYSE:CRM) posted first quarter earnings for fiscal year 2016 on May 20, beating estimates for both earnings per share and revenue. Shares are up 5.5% to $74.15

Salesforce became the global cloud computing company reach a $6 billion revenue run rate, which is faster than any other enterprise software company. CEO Marc Benioff added that the company’s current outlook puts them on track to reach $7 billion in revenue run rate later this year. He added, “Our goal is to be the fastest to reach $10 billion in annual revenue.”

The company posted non-GAAP diluted earnings per share of $0.16, beating the analyst consensus of $0.14. Salesforce posted revenue in-line with the analyst estimate at $1.51 billion, marking a 23% year-over-year increase, or a 27% year-over-year increase barring foreign exchange fluctuations.

Looking forward, Salesforce projects second quarter revenue between $1.59 billion and $1.60 billion, which would be a 21% year-over-year increase. For the full fiscal year 2016, Salesforce expects revenue between $6.52 billion and $6.55 billion, marking as 21% to 22% year-over-year increase.

Analysts weighed in following the quarterly report:

On May 20, analyst Richard Davis of Canaccord Genuity maintained a Buy rating on Salesforce  with a $85 price. Davis noted that Salesforce.com is a “structural long,” meaning that the “best strategy is to trade around a core position in the stock.” The analyst noted that CRM “Surpassed the $6B revenue run rate mark faster than any other enterprise software company with F2016 guidance suggesting the $7B mark will be surpassed later this year.” Davis concluded, “CRM is interesting to buy now and we remain quite bullish on the stock’s long-term prospects.”

Richard Davis has rated Salesforce.com 21 times since March 2011, earning an 86% success rate recommending the stock with a +21% average return per CRM rating. Overall, Davis has a 59% success rate recommending stocks with a+6.6% average return per rating.

Separately on May 21, Richard Baldry of Roth Capital maintained a Buy rating on Salesforce.com with an $80 price target. Baldry noted that solid revenue, deferred revenue, and collections grew signifying the potential for accelerated growth. Going forward, Baldry expects “greater early-year spending to normally flatten or lower earnings sequentially.” The analyst concludes, “As Salesforce.com remains the largest SaaS player, and a still rapid grower, we view its former peak valuation as possible to recapture.”

Richard Baldry has rated Salesforce.com 4 times since August 2011, earning a 100% success rate recommending the stock and a +25.2% average return per CRM rating. Overall, Baldry has a 63% overall success rate recommending stocks with an +11.8% average return per rating.

On average, the top analyst consensus for Salesforce.com on TipRanks is Moderate Buy.