Salesforce (CRM) to Report Q4 Earnings: What's in the Offing?
Salesforce CRM is slated to release fourth-quarter fiscal 2023 results on Mar 1.
For the fiscal fourth quarter, the company projects total revenues between $7.932 billion and $8.032 billion (midpoint $7.982 billion). Non-GAAP earnings are expected between $1.35 and $1.37 per share.
The Zacks Consensus Estimate for revenues is pegged at $7.99 billion, indicating an increase of 9% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $1.36 per share, implying a year-over-year decrease of 61.9%.
Salesforce’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 13.2%.
Let’s see how things have shaped up before this announcement.
Salesforce Inc. Price and EPS Surprise
Salesforce Inc. price-eps-surprise | Salesforce Inc. Quote
Factors to Consider
Salesforce’s fourth-quarter performance is likely to have benefited from the robust demand environment as customers are undergoing a major digital transformation. The customer relationship management software provider’s focus on introducing more aligned products per customer needs is expected to have boosted its top line in the quarter.
The company’s quarterly performance is likely to have gained from its focus on building and expanding relationships with leading brands across industries and geographies. Also, significant growth opportunities in the public sector are expected to have been a tailwind in the fiscal fourth quarter.
Salesforce’s ability to offer integrated solutions for customers’ business problems is likely to have been a key growth driver. The firm’s products, like Trailhead and myTrailhead, are helping companies through their transformation processes and increasing business scale with modern technology.
Also, the acquisitions of Slack, Mobify and Vlocity are anticipated to have aided CRM’s top line during the to-be-reported quarter. Growth across its four major cloud service offerings, Sales Cloud, Service Cloud, Platform, and Other and Marketing & Commerce Cloud, is anticipated to have boosted Salesforce’s subscriptions and supported its revenues.
However, a decline in software spending by small and medium businesses amid the macroeconomic uncertainty due to the pandemic and the ongoing Russia-Ukraine war might have affected Salesforce’s fiscal fourth-quarter performance.
Further, stiff competition from Oracle and Microsoft is a concern, along with forex headwinds. Also, the increasing investments 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 a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Salesforce currently carries a Zacks Rank #2 and has an Earnings ESP of -0.78%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Splunk SPLK, CrowdStrike CRWD and Broadcom AVGO have the right combination of elements to post an earnings beat in their upcoming releases.
Splunk carries a Zacks Rank #2 and has an Earnings ESP of +0.39%. The company is slated to report fourth-quarter fiscal 2023 results on Mar 1. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 222%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Splunk’s fourth-quarter earnings stands at $1.11 per share, implying a year-over-year increase of 68.2%. It is estimated to report revenues of $1.07 billion, which suggests an increase of 19% from the year-ago quarter.
CrowdStrike carries a Zacks Rank #3 and has an Earnings ESP of +2.33%. The company is scheduled to report fourth-quarter fiscal 2023 results on Mar 7. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 34.6%.
The Zacks Consensus Estimate for CRWD’s fiscal fourth-quarter earnings is pegged at 43 cents per share, indicating a year-over-year increase of 43.3%. The consensus mark for revenues stands at $624.7 million, suggesting a year-over-year increase of 44.9%.
Broadcom is slated to report first-quarter fiscal 2023 results on Mar 2. The company has a Zacks Rank #3 and an Earnings ESP of +1.36% at present. AVGO’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 2.4%.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $10.16 per share, suggesting an increase of 21.1% from the year-ago quarter’s earnings of $8.39. Broadcom’s quarterly revenues are estimated to increase 15.4% year over year to $8.89 billion.
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Salesforce Inc. (CRM) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Splunk Inc. (SPLK) : Free Stock Analysis Report
CrowdStrike (CRWD) : Free Stock Analysis Report
