What to Watch For in the Salesforce Q1 Report

By Chris Lange Updated Jan 11, 11:02PM EST · Published May 29, 12:20PM EDT

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What to Watch For in the Salesforce Q1 Report — © Thinkstock

Salesforce.com Inc. (NYSE: CRM) will report its fiscal first-quarter financial results after the markets closed on Tuesday. Thomson Reuters consensus estimates call for $0.46 in earnings per share (EPS) on $2.94 billion in revenue. The same period of last year reportedly had EPS of $0.28 and $2.39 billion in revenue.

The company completed the biggest acquisition in its history earlier this month. Salesforce agreed to pay $6.5 billion in a cash and stock deal for business software company MuleSoft. MuleSoft went public in March 2017 and spent the year increasing sales while trying to manage its growing losses. In the company’s fourth quarter, it brought in $88.7 million in sales, which was a 60% bump from the previous year during the same period.

Following Salesforce’s most recent earnings report, Merrill Lynch reiterated a Buy rating and raised its price objective to $147. At the time the firm said this:

CRM is a long-term market share winner, with inflecting margins, benefiting from the structural shift to Cloud. We see multiple positive levers: 1) broader distribution. 2) lower attrition as enterprise ramps. 3) add-on/upgrade sales. 4) broadening addressable market into analytics/AI, verticals, IoT, commerce.

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Since this report, Merrill Lynch has raised its price target again to $161. In this case, the firm noted solid bookings and margins, and strong earnings growth out to 2021 and 2022.

Excluding Tuesday’s move, Salesforce had outperformed the broad markets, with its stock up about 40% in the past 52 weeks. In just 2018 alone, the stock was up 25%.

A few analysts weighed in on Salesforce ahead of the earnings report:

Societe Generale has a Buy rating with a $135 price target.
JMP Securities has an Outperform rating with a $140 target.
Credit Suisse has an Outperform rating and a $150 price target.
Sanford Bernstein has a Market Perform rating.

Shares of Salesforce were last seen down about 1% at $126.95, with a consensus analyst price target of $139.22 and a 52-week trading range of $83.55 to $131.00.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.