How Analysts Rate Salesforce After Earnings

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Salesforce.com Inc. (NYSE: CRM) reported fiscal second-quarter financial results after the markets closed on Wednesday. Investors sent shares tumbling after this company reported earnings, but this move was not entirely based on the numbers; instead near-term guidance failed to impress. However despite the stock stumbling on Thursday, analysts took a fairly positive outlook following this earnings report, although some did trim their targets.

24/7 Wall St. has included some highlights from the earnings report, as well as what analysts are saying after the fact.

The company posted $0.24 in earnings per share (EPS) on $2.04 billion in revenue. The consensus estimates from Thomson Reuters had called for EPS of $0.22 on $2.02 billion in revenue. In the same period of the previous year, Salesforce.com posted $0.19 in EPS and revenue of $1.63 billion.

Deferred revenue increased by 26% to $3.82 billion from last year, and 27% on a constant currency basis. Unbilled deferred revenue rose 29% to roughly $8.0 billion.

In terms of guidance for the fiscal third quarter, the company expects to have EPS in the range of $0.20 to $0.21 and revenues between $2.11 billion and $2.12 billion. The consensus estimates are $0.24 in EPS on $2.13 billion in revenue for the quarter.

Guidance for fiscal 2017 was given as EPS between $0.93 and $0.95 and revenues in the range of $8.275 billion to $8.325 billion, compared to the consensus estimates of $0.95 in EPS on $8.31 billion in revenue.

Note that a Merrill Lynch report that came out before the earnings suggests that Salesforce shares could rally 200% or more  from now to 2020. The firm has unsurprisingly reiterated its Buy rating and $100 price objective.

Wedbush Securities maintained an Outperform rating but lowered its price target to $96 from $98. Despite lowering the price targets on sales and earnings, the firm said:

Our initial sense is that this is a hiccup that COO Keith Block is well-suited to work through and that salesforce.com will continue to drive demand by innovating as it has for the past 18 years, with the new Einstein artificial intelligence platform serving as a prime example.

A few other analysts weighed in on company following the earnings report:

  • BMO Capital Markets has an Outperform rating but lowered its price target to $86 from $98.
  • Citigroup maintained its Buy rating but lowered its target to $89 from $94.
  • Barclays reiterated its Overweight rating and $89 price target.
  • Deutsche Bank has a Buy rating and cut its price target to $90 from $95.
  • JMP Securities maintained a Market Outperform rating and a $92 price target.
  • Goldman Sachs has a Buy rating and lowered its price target to $96 from $103.
  • Morgan Stanley kept its Overweight rating but lowered its target to $107 from $110.
  • Mizuho has a Buy rating and increased its price target to $100 from $85.
  • Wunderlich Reiterated a Buy rating with $101 price target.
  • Jefferies reiterated a Hold rating with an $80 price target.

Shares of Salesforce were traded down more than 5% at $75.18 Thursday morning, with a consensus analyst price target of $96.72 and a 52-week trading range of $52.60 to $84.48.