Leading software-as-a-service (SaaS) provider Salesforce (CRM:NSD) is scheduled to release its first-quarter fiscal year 2024 results on May 31. With a robust portfolio of offerings and significant advancements in artificial intelligence (AI), Salesforce continues to position itself as a software giant with promising long-term prospects.
Consistent Earnings Beat and Market Performance:
Salesforce has consistently surpassed earnings expectations over the past eight quarters, a trend that has contributed to the company’s strong market performance. So far this year, CRM stock has gained an impressive 59.9%, highlighting investor confidence in the company’s growth trajectory.
Salesforce Anticipated Q1 Results:
Analysts anticipate that Salesforce will report adjusted earnings of $1.61 per share for the first quarter, surpassing both the company’s guidance and the Q1FY23 figure of $0.98 per share. This represents substantial year-over-year growth and demonstrates Salesforce’s ability to deliver solid financial performance.
In terms of revenue, analysts expect Salesforce to post $8.18 billion, representing a 10.4% increase compared to the previous year. While this reflects healthy year-over-year growth, there is a modest sequential decline of 2.4% in revenue expectations.
Analyst Insights and Positive Outlook:
Goldman Sachs analyst Kash Rangan recently reiterated a Buy rating on CRM stock ahead of the earnings report. Rangan has set an ambitious price target of $325, implying a significant upside potential of 50.8% from current levels.
Rangan’s optimism stems from Salesforce’s impressive track record of consistently beating earnings estimates and the company’s involvement in the competitive AI race. Notably, this quarter will mark the first time CRM recognizes a sequential decline in subscription revenue. However, Rangan believes that Salesforce’s vast customer data and its potential for Generative AI, combined with efficient sales efforts and recent workforce reductions, position the company favorably as macroeconomic conditions improve.
Analyst Consensus and Buying Potential:
According to the consensus analyst rating on Stock Target Advisor, Salesforce holds a Strong Buy recommendation, with 26 Buy ratings, 11 Hold ratings, and one Sell rating. The average price target for Salesforce stands at $226.66, indicating a potential upside of 5.2% from current levels.
Conclusion:
Salesforce’s upcoming Q1FY24 earnings report is highly anticipated, given the company’s history of outperforming expectations and its strong position in the SaaS market. With a diverse product portfolio and a focus on AI advancements, Salesforce is well-positioned for future growth. Investors will closely monitor the earnings announcement for insights into the company’s financial performance and to assess its ability to leverage its market advantages successfully.
