How Analysts Rate Salesforce After Earnings

Print Email 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, 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 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.

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