Salesforce (CRM) will report first quarter (April) results this afternoon. Co-Chief Executives Marc Benioff and Keith Block will host a call at 5:00 PM ET.
Salesforce is the leader in customer relationship management (CRM) cloud software, including sales force automation, customer service and support, marketing automation, digital commerce, community management, analytics, application development, Internet of Things (IoT) integration, and collaborative productivity tools. Its subscription business model results in highly visible revenue streams.
Salesforce has guided for Q1 non-GAAP EPS of $0.60-0.61 (vs. $0.52 last year) with revenue up 22% to $3.67-3.68 bln and current remaining performance obligation up 24%. The Street expects results at the high end of guidance.
The company has exceeded estimates on the top and bottom line twelve consecutive quarters.
S&P Capital IQ Consensus calls for Q2 adj. EPS +19% to $0.68 with revenue up 20% to $3.94 billion.
The company has guided for Fiscal 2020 (January) non-GAAP EPS of $2.50-2.52 with revenue up 20-21% to $15.95-16.05 bln and operating cash flow (OCF) up 20-21%. EPS guidance was $0.20 higher before the acquisition of salesfore.org. Salesforce tends to guide conservatively and tweak its revenue forecast higher as the year progresses.
Most analysts remain positive into the print; the median price target of 41 analysts is $184.
The stock fell to a 5-month low this morning as the broader market (QQQ) came under pressure but has since reclaimed its 50-WMA and is just below its 200-DMA.
Salesforce has a $115 bln market cap and trades at 7x or 30x FCF estimates. Most smaller, faster growing enterprise software peers trade with a higher price to sales ratio. The Entetprise software sector has been on fire -- a safe place in the market this year, up until yesterday. The options market is pricing in a ~6% move off earnings by Friday.
TRADE: CRM Typically has a muted response after the print itself then rallies off the dip. I will look for that to maintain. Looking to buy the dip so check back.