Salesforce CRM is scheduled to report first-quarter fiscal 2023 results on May 31. The increased adoption of cloud-based solutions amid business disruptions caused by the pandemic is expected to have driven demand for Salesforce’s products. Its ability to provide an integrated solution for customers’ business problems is expected to have been the key driver.
The company’s quarterly results are likely to reflect the benefits of the robust demand environment as organizations are undergoing a major digital transformation. Moreover, strategic acquisitions and partnerships are anticipated to have helped it win new customers.
Click here to know how CRM’s overall fiscal first-quarter results are likely to be.
Salesforce Inc. Price and EPS Surprise
Salesforce Inc. price-eps-surprise | Salesforce Inc. Quote
Digitalization to Boost Salesforce Revenues
The rapid adoption of software-as-a-service-based platforms amid the ongoing work-from-home and online learning trend is expected to have spurred demand for Salesforce’s cloud-based solutions. Salesforce’s diverse cloud offerings are likely to have helped expand its clientele, fueling the top line.
The company’s Customer 360 Truth platform, which helps connect the data from sales, service, marketing and commerce and build a single Salesforce ID for each customer, is likely to have boosted its performance. Also, Salesforce’s focus on AI and the substantial progress in its Einstein Analytics platform make it optimistic about the upcoming quarterly results.
Salesforce’s initiatives to capitalize on the overseas demand for cloud-based applications are anticipated to have bolstered the top line during the period in discussion. Further, the improved customer experience is anticipated to have aided the cloud segment.
However, a decline in software spending by small & medium businesses amid the macroeconomic uncertainty due to the pandemic might have affected CRM’s fiscal first-quarter performance. Also, the increasing investments in International expansions and data centers might have eroded the company’s profitability during the to-be-reported quarter.
Acquisitions & Partnerships to Aid Q1 Performance
Salesforce’s strategic acquisitions over the past 12 months are anticipated to have brought incremental revenues in the quarter under review. On Jul 21, 2021, the company announced completing the buyout of Slack, which positioned it as a leader in the enterprise team collaboration solution space.
Salesforce completed the acquisition of Traction on Demand in April this year. Salesforce anticipates revenues from the newly acquired Slack and Traction on Demand businesses of approximately $1.5 billion and $75 million, respectively, in fiscal 2023.
Additionally, CRM’s focus on building partnerships is anticipated to have fueled the top line. These strategic partnerships not only helped it grab new deals but also expanded the firm’s operations internationally.
Further, partnership agreements with the likes of Apple, Amazon, Google parent Alphabet, Microsoft, HP, Dell, International Business Machines and others for the firm’s cloud services are likely to have aided Salesforce’s performance during the fiscal first quarter.
Zacks Rank & Stocks to Consider
Salesforce currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader technology sector are ON Semiconductor ON, Analog Devices ADI and MaxLinear MXL. ON currently sports a Zacks Rank #1 (Strong Buy), while Analog Devices and MaxLinear each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ON’s second-quarter 2022 earnings has been revised to $1.26 per share from $1.05 over the past 30 days. For 2022, earnings estimates have moved north by 17.5% to $4.91 per share in the past 30 days.
ON’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of ON have rallied 52.7% in the past year.
The Zacks Consensus Estimate for Analog Devices’ third-quarter fiscal 2022 earnings has been revised upward by 24 cents to $2.42 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 9.6% to $9.24 per share in the past 30 days.
Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have increased 1.8% in the past year.
The Zacks Consensus Estimate for MaxLinear’s second-quarter 2022 earnings has been revised upward by 12 cents to $1.02 per share over the past 30 days. For 2022, the Zacks Consensus Estimate for MaxLinear’s earnings has moved north by 20 cents to $4.07 per share in the past 30 days.
MaxLinear’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.1%. Shares of MXL have increased 4.5% in the past year.
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