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Salesforce (NYSE: CRM) shares jumped more than 11% in early trading on Wednesday after the cloud computing software provider posted results in the first quarter that topped expectations and provided guidance seen as “a huge relief for tech investors ”by some analysts on Wall Street.
Wedbush Securities analyst Dan Ives, who has an outperform rating on Salesforce (CRM) shares and a target price of $ 225 per share, noted that Salesforce (CRM) is seen as a bellwether for tech and with it reporting outside the normal schedule, investors “focused the laser” on the report and its comments to see if there were any signs of weakness. Rather, it is the opposite.
In addition to Salesforce (CRM) reporting first-quarter revenue of $ 7.41B, which was higher than analysts ’estimates of $ 7.38B in sales, Ives said in a research that the company“ gave a mixed guidance that is better than the terror of the Street and will be a key shot in the arm for the tech bulls. ”
Ives added that the outlook for Salesforce (CRM), along with Nvidia (NVDA), Zscaler (ZS) and Palo Alto Networks (PANW) is “speaking to cloud and cyber security pockets of demand that look relatively healthy,” despite fear of being darker. macroeconomic matters.
Ivas also said the move to the cloud is approximately 40% complete and there is a “massive digital growth wave ahead” that will benefit Salesforce (CRM), as well as other cloud computing companies, including Microsoft (MSFT), Amazon (AMZN). ), Google (GOOG) (GOOGL) and Oracle (ORCL).
Other software-as-a-service stocks, including Workday (WDAY), ServiceNow (NOW), Adobe (ADBE) and Autodesk (ADSK) nagrali behind the results.
On the company’s earnings call, co-CEO Marc Benioff said there had been a “whirlwind” of recent business activity, while co-CEO Bret Taylor added that “digital transformation trends accelerated during the pandemic is constantly moving forward. “
Citi analyst Tyler Radke said the “strong” results in the first quarter came despite foreign exchange headwinds.
Radke also pointed out that current revenue performance obligations, or cRPO, growth of 24% year-over-year in the quarter helped provide “upside to revenue and profitability,” while cRPO growth in the second- quarter guidance indicates 18% year -over -year organic growth, which is “relatively solid.”
Bank of America analyst Brad Sills also called the results in the first quarter “solid,” noting that a beat and increase for revenue and margin reflects the “strategic value” of Salesforce’s (CRM) customer stack. reflecting large business and there is a “new discipline” in operating costs that should help drive “significant margin expansion and [free cash flow]. “
Earlier this month, Roth Capital analyst Richard Baldry raised his rating on Salesforce (CRM) stock to buy from neutral, but Wall Street did not respond in a positive way.