Tag Archives: crm

Salesforce.com Leads Software Stocks’ Harmony Up; Even Tableau Hums

The morning bell became music to the ears of software stock investors Thursday as Wall Street used Salesforce.com’s Q4 strength and outlook to harmonize. Salesforce.com ( CRM ), an enterprise cloud pioneer and the No. 1 maker of customer relationship management software, sang soprano, its stock gapping up 11% as soon as the conductor raised the baton on the morning after its upbeat earnings report late Wednesday. Rival SAP ( SAP ) was up 1.6% in early trade in the stock market today . Fellow enterprise software stocks Ultimate Software ( ULTI ) rose 2%, ServiceNow ( NOW ) 2.8% and Manhattan Associates ( MANH ) nearly 1%. The harmony extended to database choir: Legacy leader Oracle ( ORCL ) rose a fraction, Qlik ( QLIK ) 2.7%, Splunk ( SPLK ) 3.9% and Hortonworks ( HDP ) 1.8%. Workday ( WDAY ) leapt 5% despite a lowered price target from Wedbush. Even Tableau Software ( DATA ) was up as much as 3.5% early Thursday. Tableau stock collapsed 49.5% on Feb. 5 after the company issued soft Q4 results and an outlook of slower growth, sending the entire enterprise software sector into a tailspin. “Slowdown? What Slowdown?” asked FBN analyst Shebly Seyrafi in a Thursday research note, citing “600 seven-figure deals” signed by Salesforce.com during Q4. Salesforce set off a sectorwide rebound, but will it last? By midday, Salesforce had eased to an 8% gain, near 67.50. Most of the other stock also had eased, but remained up. Hortonworks, though, was down more than 1% and Manhattan and Splunk were down a fraction. Canaccord Genuity maintained its buy rating, but without explanation lowered its price target on Salesforce stock to 88 from 95 while praising the company. FBR, too, reportedly lowered its price target, to 82 from 88, but maintained its outperform rating. “We have pushed back against the pessimism that has permeated investors’ imaginations for the past 50 days,” wrote Canaccord analyst Richard Davis in a research note issued Thursday morning. “Salesforce decisively demonstrated that the world is far from ending, and for well-run, well-positioned companies with talented salespeople, growth is still coming in large chunks. “There was literally nothing wrong with this quarter’s print or longer-term outlook. We believe the stock’s 9% after-hours (Wednesday) pop is just the beginning of a year in which the stock delivers price appreciation that is materially better than the overall stock market.” For its fiscal Q4 ended Jan. 31, Salesforce said adjusted EPS rose 36% to 19, matching analyst consensus, on revenue up 25% to $1.81 billion vs. Wall Street’s $1.79 billion model. For fiscal Q1 2017, Salesforce expects adjusted EPS of 23-24 cents, up 47% at the midpoint and ahead of analysts’ 21-cent estimates, on sales up 25% to $1.89 billion, whereas analysts expected $1.86 billion. Brian Wieser, an analyst with Pivotal Research, noted that deferred revenue growth was up 29% in Q4, foreshadowing sales to come. “By segment, Marketing Cloud was up by 31%,” he wrote in a Thursday research note. “App Cloud and other (formerly the Platform segment) was up by 43%, Services Cloud was up by 35% and the flagship Sales Cloud was up by +12%. “Commentary about activity in the most recent quarter included reference to the company’s signing of a new nine-figure transaction as well as a renewal of another large customer, also with a nine-figure sum.” Image provided by Shutterstock .

Salesforce.com Meets And Beats On Q4, Stock Jumps On Outlook

Salesforce.com ( CRM ) matched analyst forecasts on earnings and beat them on revenue with a record fourth quarter, but shares soared in late trade after the enterprise cloud pioneer raised its forecast for sales growth. Announcing earnings after the market close Wednesday, Salesforce said adjusted fourth-quarter earnings rose 36% to 19 cents per share on revenue that rose 25% to $1.81 billion. Earnings were right on the money, according to estimates from analysts polled by Thomson Reuters, but sales were better than the $1.79 billion revenue they had anticipated. The No. 1 developer of customer relationship management software, Salesforce raised full fiscal 2017 revenue guidance to a range of $8.08 billion to $8.12 billion, up from $8.0 billion to $8.1 guided after its third-quarter release. For its first fiscal quarter of 2017, which ends in April, Salesforce said it expects earnings per share of 23-24 cents, up 47% at the midpoint and ahead of analysts’ 21-cent consensus view. That’s on revenue up 25% to $1.89 billion, where analysts expected $1.86 billion, up 23%. Its results seemed to strengthen hope that Salesforce might trigger an upturn in software stocks, reversing  Tableau Software ‘s ( DATA ) profitable but softer fourth quarter and weak guidance that triggered a 49.5% collapse in Tableau stock Feb. 5. Tableau’s misfortune also precipitated a 15% plunge in the entire IBD Computer Software-Database industry group, where legacy software developer Oracle ( ORCL ) also resides. Salesforce stock also fell 13% at the time, and the IBD Computer Software-Enterprise industry group where it lives fell 8%. Neither group has recovered, the most notable exception being steady Oracle, up slightly Wednesday to 36.63, 19% off a six-month high set June 17. Days after the Tableau debacle, Salesforce set a 16-month low at 52.60 on Feb. 8, before rising 19.5% through Tuesday’s close at 63.98.  Salesforce ended the regular session down 0.6% to 62.50  in the stock market today . That was 24% off the stock’s all-time high of 82.90, hit Nov. 19, when Salesforce reported fiscal-third-quarter earnings up 50%. After Wednesday’s earnings release, Salesforce jumped more than 8% to 67.95 in after-hours trading. “By any measure, this was a spectacular finish to the year with 27% revenue growth in constant currency for the fourth quarter and for the full year,” Chief Executive Marc Benioff said in the earnings release. “We are raising our fiscal year 2017 revenue guidance to $8.12 billion at the high end of our range — unprecedented growth for a company of our size and scale.” Chief Financial Officer Mark Hawkins said its adjusted operating margin rose by 177 basis points, driving full-year operating cash flow up 37% to $1.6 billion during the fourth quarter. Said President and Chief Operating Officer Keith Block: “We hit an all-time high in large transactions in fiscal 2016,” adding that Salesforce’s cloud platform is growing sales “across every region, every cloud and every industry.” For full fiscal 2016, revenue rose 24% to $6.67 billion where analysts expected $6.65 billion. Salesforce said subscription and support revenue grew 24% to $6.21 billion and professional services and other revenue rose 28% to $462 million. The full-year adjusted earnings matched Wall Street at 75 cents. Salesforce managed to take a fourth-quarter unadjusted loss of 4 cents, better than the 6-cent loss expected by Wall Street. Beyond predicting Salesforce’s first $8 billion year in fiscal 2017, Benioff repeatedly assures that the company is “well on the path to reach $10 billion faster than any other enterprise software company.” RBC Capital Markets analyst Ross MacMillan said in a recent note to clients that the firm’s Salesforce1 platform for mobile-application development is driving fresh growth, although “there are many avenues to sustain growth, including service and marketing, the platform, and international and future initiatives.” MacMillan went on to say: “We think Salesforce can continue to drive premium growth for its size, and it remains an important strategic asset.” RBC maintains an outperform rating on Salesforce.com stock, with a price target of 80, as “one of the best positioned companies in large-cap software.” Image provided by Shutterstock .

Will Salesforce.com Help End Enterprise Software’s ‘Beatdown’?

More than most, Salesforce.com’s fourth-quarter earnings — scheduled for release after the market close Wednesday — could help bring an end to what one analyst calls “the beatdown that growth software stocks endured for about 45 days.” “We believe that last week probably marked a bottom, or close to a bottom” for software companies that “are down about 25% for the average stock,” wrote Canaccord Genuity analyst Richard Davis in a research note Sunday. “Deals are getting a bit more scrutiny than before, but we believe we are nowhere near anything that looks like an IT spending clampdown. We are broadly optimistic on the outlook for next-generation software companies.” Salesforce ( CRM ) stock hit a 16-month low at 52.60 on Feb. 8, then rose 22% through Monday’s close at 63.98. Salesforce stock was down a fraction, near 63.50, in afternoon trading in the stock market today . That’s 23% off the stock’s all-time high of 82.90, hit Nov. 19, after Salesforce reported fiscal-third-quarter earnings up 50%. Salesforce is a cloud software pioneer and the No. 1 maker of customer relationship management software. Salesforce is coming off many years of double-digit revenue growth and seven consecutive quarters of double- or triple-digit earnings-per-share gains, year over year. Its market cap at $42 billion makes it half the size of SAP ( SAP ), the largest in IBD’s Computer Software-Enterprise industry group, and much smaller than business software giant Oracle ( ORCL ), with its $154.7 billion market cap. But Salesforce is much larger than next-generation cloud software companies  Workday ( WDAY ), ServiceNow ( NOW ), Ultimate Software ( ULTI ) and others. Salesforce’s fiscal Q4 2016, which ended in January, should make it eight consecutive quarters of double-digit-or-better earnings growth. Analysts polled by Thomson Reuters expect Salesforce to report earnings up 36% to 19 cents per share minus items, on revenue up 24% to $1.79 billion. Salesforce had guided Q4 to adjusted EPS of 18 to 19 cents on sales up 24% at the midpoint. Earnings especially were a tough comparison to follow, as EPS had doubled to 14 cents in fiscal Q4 of 2015. For the current Q1 2017 ending in April, Wall Street models EPS up 31% to 21 cents ex items, on revenue up 23% to $1.861 billion. Salesforce CEO Marc Benioff said at the Q3 analyst conference: “We expect to deliver our first $8 billion year during our fiscal year 2017, which puts us well on the path to reach $10 billion faster than any other enterprise software company.” The company’s Salesforce1 platform for mobile-application development should spark growth, RBC Capital Markets analyst Ross MacMillan said in a research note Sunday, although “there are many avenues to sustain growth, including service and marketing, the platform, and international and future initiatives. “While deceleration is inevitable, we think Salesforce can continue to drive premium growth for its size, and it remains an important strategic asset.” RBC maintains an outperform rating on Salesforce.com stock, with an 80 price target, as “one of the best positioned companies in large-cap software.”