Salesforce Reports Upbeat Q4 Results; Street Says Buy

Customer relationship management software services provider Salesforce (NYSE:CRM) has reported stronger-than-expected results for the fourth quarter ended January 31, 2022. The robust results were on the back of strong growth in revenues.

Following the results, shares of the company rose 3.8% to close at $216.75 in Tuesday’s extended trading session.

Revenue & Earnings

Salesforce’s quarterly revenues came in at $7.33 billion, up 26% from the previous year. Further, the figure topped the consensus estimate of $7.24 billion. With a year-over-year uptick of 25%, subscription and support revenues of $6.83 billion accounted for roughly 93.2% of the total quarterly revenues of the company.

The company’s quarterly earnings stood at $0.84 per share. Although the figure was lower than the previous year’s earnings of $1.04 by 19.2%, it surpassed the consensus estimate of $0.75.

Other Operating Metrics

The remaining performance obligation and current remaining performance obligation rose 21% and 22% from the prior year to $43.7 billion and $22 billion, respectively.

Salesforce reported an operating margin of 15% during the quarter.

Outlook

For the first quarter, the company expects revenues in the range of $7.37 billion to $7.38 billion against the consensus estimate of $7.26 billion. Further, it anticipates earnings between $0.93 to $0.94 per share.

For full-year 2023, Salesforce sees revenues in the range of $32 billion to $32.1 billion against the consensus estimate of $31.78 billion. It foresees earnings in the range of $4.62 to $4.64 per share.

Management’s Take

The Co-CEO of Salesforce, Marc Benioff, said, “We had another phenomenal quarter and full-year of financial results. As we continue to see tremendous demand from customers, we’re raising our FY23 revenue guidance to $32.1 billion at the high-end of range, with non-GAAP operating margin of 20%, and operating cash flow growth of 22% year-over-year.”

Stock Rating

Consensus among analysts is a Strong Buy based on 16 Buys and 2 Holds. The average Salesforce stock prediction of $311.83 implies upside potential of 49.3% from current levels. Shares have declined 2.2% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Salesforce’s performance this quarter.

According to the tool, year-to-date, the Salesforce website traffic recorded a fall of 35.50%, compared to the previous year.

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