Tag Archives: crm

Salesforce Upside? Internet Of Things Might Boost Customer Service

The Internet of Things could put some oomph back into Salesforce.com ’s ( CRM ) revenue growth, though a Morgan Stanley report still sees a compound annual growth rate of 25% through fiscal 2019. Salesforce is the No. 1 maker of CRM, or customer relationship management software. It pioneered software-as-a-service, selling online subscriptions to its products that customers bought as needed. Saleforce’s revenue growth slowed to 24% in fiscal 2016 ended Jan. 31, after rising from 32% to 37% in fiscal 2012 through fiscal 2015. Keith Weiss, a Morgan Stanley analyst, forecasts 25% CAGR revenue growth for Salesforce.com over the next three years. “The rapid growth of the Internet of Things and connected devices has the potential to bring transformative change to the customer service industry,” said Weiss in a research report. “We see cloud-based customer service applications as one of the most likely (and first) areas to benefit from the IoT trend.” The Internet of Things refers to wireless technology that connects industrial, medical, automotive and consumer devices to the Internet. “Despite a leading market share in customer service solutions, we believe meaningful opportunities remain for Salesforce.com to expand its wallet share among existing customers and target adjacent opportunities …,” Weiss wrote. The San Francisco-based company has steadily expanded its focus from mostly small businesses to large enterprises. Salesforce.com stock is down nearly 6% in 2016 and was down 1%, near 74, in afternoon trading in the stock market today .  But Salesforce stock is up more than 40% since touching a 20-month low below 53 in early February. Salesforce.com has a high IBD Composite Rating of 92 out of a possible 99, though IBD’s Computer Software-Enterprise group ranks just No. 126 out of 197 groups.

Zendesk Gains Traction In Enterprise As Q1 Revenue Beats

Zendesk ( Z ) stock jumped after the provider of customer-support software to retailers reported a smaller-than-expected Q1 loss and raised its full-year 2016 revenue guidance. Zendesk stock was up more than 8% in early trading in the stock market today , near 25, and breaking out of a cup-with-handle base at a 23.87 buy point in heavy volume. San Francisco-based Zendesk said it lost 8 cents per share minus items, vs. analysts’ estimate of a 10-cent per-share loss. Revenue rose 62% to $68.5 million, topping views of $66 million. “Zendesk finished Q4 with over 75,600 customer accounts, up from 69,000 last quarter, representing a record 6,600 customer additions,” said Pacific Crest analyst Brendan Barnicle in a research report late Tuesday. “As a result, customer acquisition costs and return on acquisition costs improved in Q1 over Q4.” For 2016, Zendesk forecast revenue  of $302.5 million at the midpoint of its guidance range, which would be up 45%, and is $7.5 million above its earlier guidance of $295 million. Zendesk provides a cloud-based customer service software platform. In November, it announced a partnership with Microsoft ( MSFT ). Zendesk competes with Salesforce.com ( CRM ), Freshdesk and Desk.com. Zendesk is gaining traction in the enterprise market, says Bhavan Suri, an analyst at William Blair. “Zendesk signed 50% more deals with average contract value of more than $50,000, and the average deal size for these transactions increased 30% year-over-year — a clear indication of the company’s success in the enterprise market,” Suri wrote in a research report. However, Zendesk has only a so-so IBD Composite Rating of 64 out of a possible 99. IBD’s Computer-Software Enterprise group ranks just No. 126 out of 197 groups. Zendesk’s stock had plunged on Feb. 5 amid a broad sell-off in tech stocks amid concern over China’s slowdown, tech spending and falling oil prices.

Four Notable Tech Stocks With Earnings After Close Worth Watching

Earnings reports are on tap for Paycom Software ( PAYC ), Rubicon Project ( RUBI ), Zendesk ( ZEN ) and Zillow Group ( ZG ) after the market close Tuesday, and all sport long streaks of double-digit, or higher, sales growth. Earnings reports can often create big stock moves, up or down, depending on whether the company misses or beats Wall Street’s expectations, and whether its outlook for the upcoming quarter and year beat or miss expectations. Paycom is expected to report revenue of $83.4 million, up 51% year over year and maintaining a string of double-digit gains going back more than four years. The consensus on earnings per share minus items is 20 cents, up 67%. Paycom provides a cloud-based employment management platform with a software-as-a-service business model, with customers buying the software as needed. The company came public in April 2014. Paycom has a strong IBD Composite Rating (CR) of 96 and the highest-possible EPS Rating of 99. Credit Suisse analyst Michael Nemeroff has an outperform rating on Paycom stock, and price target of 43. “We believe that Paycom is well positioned to deliver strong revenue growth over the next two years,” Nemeroff  wrote in an earnings preview report. Paycom stock was near 38, down 2.5%, in morning trading in the stock market today . Rubicon Revenue Could Cross At 60% Gain Rubicon Project is expected to report revenue of $59.4 million, up 60% and maintaining double- or triple-digit revenue growth going back more than four years. The EPS consensus minus items is 3 cents, vs. 2 cents last year. Rubicon made its IPO in April 2014. It provides an online platform that helps optimize digital ad buying, selling and placement. The stock has a strong 98 CR and an EPS Rating of 80. RBC Capital Markets analyst Andrew Bruckner rates Rubicon stock outperform, with a price target of 22. Rubicon stock was near 19.70, flat, Tuesday morning. Zendesk Also Growing By Double-Digit Percentages Zendesk is expected to report revenue of $63.9 million, up 51% and maintaining a string of double- and triple-digit revenue growth going back more than four years. The consensus on EPS minus earnings is a 10-cent loss. The company, which came public in May 2014, has yet to show a profit. On Monday, Zendesk announced it hired a new chief financial officer, Elena Gomez, who previously was senior vice president of finance and strategy for Salesforce.com ( CRM ). Zendesk is a cloud-based provider of customer service software. The stock has a CR of 64 and EPS Rating of 46. Rosenblatt Securities analyst Kirk Adams rates Zendesk stock a buy, with a price target of 25. “We anticipate a solid report and positive commentary on the recently completed quarter and their future prospects,” Adams wrote in an earnings preview. Zendesk stock was near 23, down 2%, Tuesday morning. Zillow Seen Swinging To A Loss Zillow Group is expected to report earnings of 176.6 million, up 39% and maintaining double or triple digit growth going back more than four years. The EPS consensus is a 9-cent loss, swinging from a 5-cent profit in the year-earlier quarter. Zillow, the leading real estate website, came public in July 2011. The stock has a CR of 54  and EPS Rating of 50. Cowen analyst Thomas Champion has an underperform rating on Zillow and a price target of 12. Zillow stock was near 25.50, down 2%, Tuesday morning.