Salesforce Gains 11% After Strong Earnings Report

Key Insights

• Salesforce beat analyst estimates on both earnings and revenue. 
• The company presented strong guidance for the next quarter. 
• The increase in the share repurchase program served as an additional positive catalyst for the stock. 

Salesforce Easily Beat Analyst Estimates

Salesforce rallied 11% as traders reacted to the strong earnings report. The company reported revenue of $8.38 billion and adjusted earnings of $1.68 per share, beating analyst estimates on both earnings and revenue.

In the first quarter, Salesforce expects to report revenue of $8.16 billion – $8.18 billion and adjusted earnings of $1.60 – $1.61 per share. The first-quarter guidance has significantly exceeded analyst estimates.

For the full year, Salesforce projects to report revenue of $34.5 billion – $34.7 billion and adjusted earnings of $7.12 – $7.14 per share.

The company commented: “Our relentless focus on execution and proactive management of the currency environment allowed us to close out a strong quarter and set us up for a transformational fiscal year 24.”

Salesforce Increased Its Share Repurchase Program To $20 Billion

Salesforce reported that it repurchased $2.3 billion worth of its shares in the fourth quarter and $4 billion in the fiscal year 2023. The company decided to increase the share repurchase program to $20 billion.

The increase in the share repurchase program is bullish for the stock as it provides direct support to the company’s shares.

Analysts rushed to upgrade the stock due to the strong earnings report and the increase in the share repurchase program.

Salesforce stock touched highs near the $310 level back in 2021 and has suffered a serious pullback in 2022. In 2023, the stock gained more than 35% amid rising demand for tech stocks. The strong earnings report may provide significant support to Salesforce shares, although the dynamics of the stock will also depend on general market sentiment.

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