Technology

What to Expect When Salesforce Reports After the Close

Chris Lange

Published: February 25, 2020 10:25 am

Last Updated: March 13, 2020 10:23 pm

Salesforce.com Inc. (NYSE: CRM) is scheduled to release its fiscal fourth-quarter financial results after the markets close on Tuesday. The consensus estimates are calling for $0.55 in EPS and $4.75 billion in revenue. In the same period of last year, the software company said it had $0.70 in EPS and $3.60 billion in revenue.

Salesforce previously issued guidance for the fourth quarter with EPS in the range of $0.54 to $0.55 and revenue between $4.743 billion and $4.753 billion.

Following the fiscal third-quarter report, Wedbush reiterated an Outperform rating with a $192 price target, and this target has since been increased to $217. The boutique investment firm pointed out that while investors may have been disappointed with the guidance, Wedbush is not concerned about these secondary guidance elements, which reflect expenses associated with the fourth-quarter Dreamforce conference, pull-forward of fourth-quarter renewals into the third quarter, and likely conservatism concerning Tableau’s license seasonality.

Practically, all the analysts following Salesforce noted a strong performance on all metrics in the third-quarter report. However, the guidance was a weak point. Since then, analysts have been raising their targets, seemingly in anticipation of this latest report.

Excluding Tuesday’s move, Salesforce stock had underperformed the broad markets with a gain of about 15% in the past 52 weeks. In the past quarter alone, the share price was up about 13%.

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

• Stifel has a Buy rating with a $210 price target.
• BMO has an Outperform rating and a $220 price target.
• UBS Group has a Buy rating with a $230 target price.
• Morgan Stanley’s Buy rating comes with a $225 price target.
• Wedbush rates it as Outperform with a $217 target price.
• Cowen has an Outperform rating with a $210 price target.
• Jefferies has a Buy rating and a $220 price target.

Salesforce.com stock traded up about 1% at $188.22 a share on Tuesday, in a 52-week range of $137.87 to $195.72. The consensus price target is $203.31.