Salesforce (CRM) is scheduled to report results of its second fiscal quarter after the market close on Wednesday, August 25, with a conference call scheduled for 5:00 pm ET. What to watch for:
1. GUIDANCE: Along with its first quarter earnings report, Salesforce guided to fiscal year 2022 adjusted earnings per share of $3.79-$3.81. Consensus for EPS, which was $3.43 at the time, has since risen to $3.82. The company also forecast 2022 revenue of $25.9B-$26B. Consensus, which was $25.76B at the time, has increased to $26.01B. In addition, the company provided second quarter adjusted EPS guidance of 91c-92c on revenue of $6.22B-$6.23B. Consensus for earnings, which was at 85c at the time, has risen to 92c, and consensus for revenue, which was at $6.15B, has inched up to $6.24B.
2. PARTNERSHIPS, FEATURES: In May, Salesforce and Disney Studios Content (DIS) announced an innovation partnership to help support Disney marketers and filmmakers using the Salesforce platform. The company also announced in May the introduction of MuleSoft’s next major release of Anypoint Platform with DataGraph. In June, Salesforce announced a partnership with Combs Enterprises to create SHOP Circulate, a curated digital marketplace with products exclusively created and sold by Black entrepreneurs. The company also announced in June that Movado Group (MOV) is using Salesforce to drive global shopping experiences and Herman Miller (MLHR) is partnering with the company to deliver a more cohesive omni-channel experience. Additionally in June, Salesforce unveiled new innovations across Digital 360 and announced its new Corporate and Investment Banking for Financial Services Cloud technology. The company also announced a multi-year partnership with Team USA and the LA28 Olympic and Paralympic Games as well as a partnership with NBCUniversal (CMCSA) to support its Olympic and Paralympic coverage across platforms for the next seven years. Additionally in June, Salesforce expanded its strategic partnership with Amazon Web Services (AMZN) and introduced the next generation of Salesforce Platform. The company also formed a Global Advisory Board in June to provide strategic guidance and support the company’s growth into new markets. In July, Salesforce debuted its Advertising Sales Management for Media Cloud application.
3. SLACK ACQUISITION: In December, Salesforce and Slack Technologies announced they had entered into a definitive agreement under which Salesforce will acquire Slack. Under the terms of the agreement, Slack shareholders were set receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7B based on the closing price of Salesforce's common stock on November 30, 2020. In a July, Salesforce announced it had completed its acquisition of Slack. The company said, “As part of Salesforce, Slack will be positioned to accelerate and extend its mission to make work life simpler, more pleasant, and more productive. Slack will continue to operate under the Slack brand, driving forward a continued focus on its mission, customers, and community.” Slack continues to be led by CEO and Co-Founder Stewart Butterfield.
4. ANALYST VIEWS: On August 18, JMP Securities analyst Patrick Walravens raised the firm's price target on Salesforce to $320 from $282 and kept an Outperform rating on the shares. The analyst noted that channel checks on the company's quarter have been mostly positive, with highlights that included a "large ten-figure deal" with a networking company along with "commentary around big deals in general". Walravens added that his new price target models an enterprise value to expected 2022 revenue multiple of 9.3-times, which is up from 8.2-times prior but still a 20% discount to the SaaS peer group median multiple of 11.5-times. On August 23, Barclays analyst Raimo Lenschow raised the firm's price target on Salesforce to $291 from $285 and kept an Overweight rating on the shares.
Salesforce
+0.38 (+0.15%)
Disney
-0.26 (-0.15%)
Movado
-0.22 (-0.64%)
Herman Miller
+0.74 (+1.71%)
Comcast
+0.1 (+0.17%)
Amazon.com
-7.12 (-0.22%)