Salesforce Q1 Earnings and Revenue to Rise Over 20%; Target Price $272
The San Francisco, California-based software company Salesforce is expected to report its first-quarter 2022 earnings of $0.88 per share, which represents year-over-year growth of over 25% from $0.70 per share seen in the same period a year ago.
The leading provider of enterprise cloud computing solutions would post revenue growth of about 21% to $5.9 billion. In the last four quarters, on average, the company has beaten earnings estimates over 18%.
The company was founded in 1999 on the concept of delivering CRM applications via the Internet reported record sales in 2020, with revenue up more than 23% to $21.3 billion, to hit $20 billion for the first time ever.
According to Zacks Research estimates, Salesforce will post fiscal 2022 revenue growth of 21% to $25.7 billion, with FY23 projected to climb 19% higher to come in at $30.5 billion. Meanwhile, its adjusted FY22 earnings are projected to fall 30% to $3.44 a share, with FY23 then set to bounce 18% above our current-year estimate.
Salesforce shares traded about 2% higher at $226.50 on Monday, ahead of its fiscal first-quarter 2022 earnings to be released on Thursday, May 27.
“Our survey points to a strong qtr w/ 83% of partners meeting/beating targets, the best quarterly performance we’ve seen since the pandemic. Checks indicate project investments are coming back online & the avg CY21 growth outlook increased to 32% vs. 21% last qtr,” noted J. Derrick Wood, equity analyst at Cowen.
“We think good margin upside is likely too. With weak sentiment, we see an attractive set-up into the print.”
Salesforce Stock Price Forecast
Twenty-two analysts who offered stock ratings for Salesforce in the last three months forecast the average price in 12 months of $272.19 with a high forecast of $315.00 and a low forecast of $230.00.
The average price target represents a 20.18% increase from the last price of $226.49. Of those 22 analysts, 18 rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the stock price forecast of $270 with a high of $381 under a bull scenario and $186 under the worst-case scenario. The firm gave an “Overweight” rating on the cloud-based software company’s stock.
“Well positioned for ramping digital transformation demand and more constructive margin commentary from management tilts the risk/reward significantly more favorably, particularly given the 25% relative under-performance in Salesforce (CRM) post the Slack announcement. Upgrading to Overweight with a $270 price target,” noted Keith Weiss, equity analyst at Morgan Stanley.
Several other analysts have also updated their stock outlook. The Goldman Sachs Group set a $315 price target. The firm currently has a buy rating on the CRM provider’s stock. Sanford C. Bernstein set a $233 price target and gave the stock a neutral rating. Jefferies cut the target price to $300 from $320. Mizuho slashed the price objective to $270 from $290.
Check out FX Empire’s earnings calendar