Stocks

Salesforce (CRM) to Report Q2 Earnings: What's in the Offing?

Salesforce CRM is slated to release second-quarter fiscal 2022 results on Aug 25.

For the fiscal second quarter, the company projects total revenues to be between $6.22 billion and $6.23 billion. Moreover, non-GAAP earnings are expected between 90 cents and 92 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $6.23 billion, indicating an increase of 21% from the year-ago quarter reported figure.

The consensus mark for earnings has remained unrevised at 91 cents per share for the past 60 days. The bottom line is expected to decrease 36.8% year on year.

Notably, Salesforce’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average beat being 81.6%.

Let’s see how things have shaped up prior to this announcement.

salesforce.com, inc. Price and EPS Surprise

salesforce.com, inc. Price and EPS Surprise

salesforce.com, inc. price-eps-surprise | salesforce.com, inc. Quote

Factors to Note Ahead of Q2 Earnings

Salesforce’s second-quarter performance is likely to have benefited from the robust demand environment as customers have been undergoing a major digital transformation. The customer relationship management software provider’s ability to offer integrated solutions for customers’ business problems is likely to have been a key growth driver.

Growth across its four major cloud service offerings, Sales Cloud, Service Cloud, Platform and other plus Marketing & Commerce Cloud is anticipated to have boosted Salesforce’s subscription and supported its revenue stream, which is a major catalyst.

The company’s quarterly performance is also likely to have gained from its firm focus on building and expanding relationships with leading brands across industries and geographies. In addition, significant growth opportunities in the public sector are expected to have been a tailwind during the quarter under review.

Also, the acquisitions of the likes of Mobify and Vlocity are anticipated to have significantly aided the company’s top-line growth during the quarter to be reported.

Nonetheless, decline in software spending by small & medium businesses (SMBs) amid the macroeconomic uncertainty due to the COVID-19 pandemic might have affected the company’s fiscal second-quarter performance.

Further, stiff competition from Oracle and Microsoft is a concern in addition to forex headwinds. Increasing investment in international expansions and data centers might have eroded the company’s profitability during the to-be-reported quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Salesforce this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Salesforce has an Earnings ESP of 0.00% and currently carries a Zacks Rank of 3.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Chewy Inc. CHWY has an Earnings ESP of +20.00% and currently flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

KB Home KBH has an Earnings ESP of +0.63% and sports a Zacks Rank #1, at present.

AutoZone AZO has an Earnings ESP of +9.54% and carries a Zacks Rank #2, at present.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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