Salesforce (NYSE: CRM) is arguably Wall Street’s favorite cloud company; the stock has seen a staggering 87% growth so far this year. The company is now slated to report first-quarter 2020 earnings results next week and investors are looking at an extended bull run.
The results are scheduled to be announced after the regular trading hours on Tuesday, June 4. Analysts have projected Q1 earnings of 61 cents per share on revenues of $3.68 billion, up 22% year-over-year.
The street consensus falls within the top end of the forecast made by the management during the last earnings announcement. The San Francisco, California-based company had said that it expects to see quarterly revenues hitting $3.67-3.68 billion, generating GAAP EPS of $0.10-0.11 and non-GAAP EPS of $0.60-0.61.
Salesforce has a good history of beating market estimates; however, the high expectations maintained by investors could backfire if it fails to outperform. During the last-reported quarter, despite beating the estimates on both the top and bottom line, shares fell as investors were unimpressed with the Q1 outlook.
Since there seems to be no slowing down of demand for its customer-relationship-management software, expect to see increased client base this quarter. Regular product launches and robust expansion in the international markets will continue to impact top line growth for the company. The acquisition of Mulesoft last year should also provide some fillip to the top line in Q1.
During the earnings conference calls, you may expect to hear more about the company’s expansion strategy, which are powered by partnerships with leading tech firms including Alphabet (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN).
Even though some market observers feel the stock is overpriced, it continues to have a 12-month average price target that suggests otherwise. The average price target on the stock is $183.50, suggesting an 18% upside from the last close.