Salesforce.com Inc. (NYSE: CRM) is scheduled to report its most recent financial results after the markets close on Wednesday. The Thomson Reuters consensus estimates are $0.23 in earnings per share (EPS) on revenue of $1.89 billion. In the same period of last year, the company posted EPS of $0.23 and $1.51 billion in revenue.
This company has been a momentum trader’s dream over the past few years, but it seems to be slowing in 2016. Many on Wall Street feel that while the stock trades mostly in line with its fast organic software-as-a-service peer group, which many saw as having the largest growth rate in 2015, the company should trade at a premium to the group. Its growing portfolio of enterprise-class solutions have not only enhanced the brand but helped to achieve access into bigger companies.
Wall Street analysts see substantial billings growth, and many have raised their fiscal 2016 estimates on both revenues and earnings. Importantly, the company’s new analytics products are factored into many 2016 estimates and could provide upside.
However, depending on how these earnings turn out, analysts could be changing their tune, because Salesforce has not had that great of a showing this year. Its most recent earnings report was fairly positive, and it definitely pulled the company out of the market bottom we saw in February.
Currently Salesforce trades at roughly 77 times its fiscal 2017 earnings.
So far in 2016, Salesforce has performed relatively in line with the broad markets. Over the past 52 weeks, the stock is up over 5%.
Prior to the release of the earnings report, a few analysts weighed in on Salesforce:
- Citigroup reiterated a Buy rating with an $87 price target.
- Jefferies has a Hold rating with a $74 price target.
- Brean Capital reiterated a Buy rating.
- Mizuho reiterated a Buy rating with a $90 price target.
- Oppenheimer reiterated a Buy rating.
Shares of Salesforce were trading up 1.3% at $77.80 on Wednesday, with a consensus analyst price target of $90.60 and a 52-week trading range of $52.60 to $82.90.
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