What To Expect From Salesforce

Salesforce
Salesforce
.com is scheduled to report earnings after Wednesday’s close. The stock hit a record high near $318.71/share in 2024 and, before Wednesday’s open, it was trading near $269. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview

The company is expected to report a gain of $2.38/share on $9.14 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $2.45/share. The Whisper number is the Street’s unofficial view on earnings.

A Closer Look At The Fundamentals

The company has grown its earnings nicely over the last few years. In 2020, the company earned $2.99, in 2021 earnings grew to $4.92, then came in at $4.78 in 2022, and then grew in 2023 to $5.24. However, looking forward, the company is expected to grow earnings to $8.22 in 2024 and then earnings are expected to be $8.31 in 2025, and grow to $9.49 in 2026. That is a big jump in a few short years.

A Closer Look At The Technicals

Technically, the stock is trading 15% below its record high. Additionally, the stock is below its 50 day moving average line but above its longer term 200 day moving average line, which is a mixed sign. Strong stocks tend to be above their rising 50 and 200 DMA lines. Separately, it is encouraging to see the number of high ranked funds that own the stock grow from 4588 in the quarter ending in June 2023 to 4919 in the quarter ending March 2024. That is a strong sign of institutional accumulation.

Company Profile

Salesforce, Inc. provides Customer Relationship Management (CRM) technology that brings companies and customers together worldwide. The company’s service includes sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and artificial intelligence, and deliver quotes, contracts, and invoices; and service that enables companies to deliver trusted and highly personalized customer support at scale.

In addition, its platform offering comprise a flexible platform that enables companies of various sizes, locations, and industries to build business workflow and apps with customer; online learning platform that allows anyone to learn in-demand Salesforce skills; and Slack, an intelligent productivity platform. The company’s marketing services enables companies to plan, personalize, automate, and optimize customer marketing journey, connecting interaction, and connected products; and commerce services, which empowers shopping experience across various customer touchpoint, such as mobile, web, social, and stores and provides click-to-code tools that offers customers to build and deploy solutions.

Further, its analytics offering includes Tableau, an end-to-end analytics solution for range of enterprise use cases and intelligent analytics with AI models, spot trends, predict outcomes, creates summaries, timely recommendations, and take action from any device; and integration service including MuleSoft, which provides building blocks to deliver end-to-end and connected experiences.

Additionally, the company provides data cloud, a hyperscale data engine native to Salesforce; vertical services to meet the needs of customers in industries, such as financial services, healthcare and life sciences, manufacturing and automotive and government; and offers salesforce starter for small and medium-sized businesses. Salesforce, Inc. was incorporated in 1999 and is headquartered in San Francisco, California.

Pay Attention To How The Stock Reacts To The News

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.

Disclosure: The stock has been featured on FindLeadingStocks.com which is my members-only stock market membership site.