A First Look Into Salesforce.com, inc. (CRM) 2Q Earnings

Salesforce Flies High in the Cloud with Solid Earnings

Cloud-based software maker salesforce.com, inc. (NYSE:CRM) reported solid second-quarter results, with revenue increasing 26% to $2.56 billion, $44 million above consensus expectations, and non-GAAP EPS of $0.33, a penny above the Street mean. The company also reported billings of $2.34 billion, an increase of 26%, which was above guidance of 16% growth and consensus expectations of 17% growth.

Looking forward, the company raised its fiscal 2018 revenue guidance by $100 million at the midpoint and non-GAAP EPS guidance by a penny to $1.29 to $1.31, in line with the Street mean of $1.30. However, third quarter 2018 billings growth guidance of 9.6% came in below consensus estimates of 19.5% growth.

Salesforce Marc Benioff commented, “We had a phenomenal quarter of growth, reaching a huge milestone for the company, becoming the first enterprise cloud software company to break the $10 billion revenue run rate […] We did this faster than any other enterprise software company in history. Our continued momentum as the leader in CRM, the fastest-growing segment of our industry, combined with more than $15 billion in billed and unbilled deferred revenue, puts us well on the path to $20 billion and beyond.”

Shares of Salesforce.com are trading at $91.90, down $1.05 or -1.13% in after-hours trading Tuesday. CRM has a 1-year high of $93.44 and a 1-year low of $66.43. The stock’s 50-day moving average is $89.86 and its 200-day moving average is $86.35.

On the ratings front, Salesforce has been the subject of a number of recent research reports. In a report released today, Drexel Hamilton analyst Brian White reiterated a Buy rating on CRM, with a price target of $111, which implies an upside of 19% from current levels. On August 20, BMO’s Keith Bachman reiterated a Buy rating on the stock and has a price target of $100.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian White and Keith Bachman have a yearly average return of 9.9% and 12.6% respectively. White has a success rate of 61% and is ranked #192 out of 4608 analysts, while Bachman has a success rate of 67% and is ranked #168.

Overall, one research analyst has assigned a Hold rating and 10 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $104.50 which is 12% above where the stock opened today.

salesforce.com is a customer relationship management company, which provides enterprise software. Its Customer Success Platform offers a comprehensive portfolio of services, such as sales force automation, customer service and support, marketing automation, digital commerce, community management, analytics, application development, IoT integration, collaborative productivity tools and professional cloud services.


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