Salesforce (CRM) delivered impressive third quarter earnings along with an upbeat profit forecast for the remainder of the year, sending shares 9% higher Thursday morning. They’ve since settled around 6%.
The company saw earnings improve 51% year over year to $2.11 per share, narrowly beating the consensus of $2.06 per share.
Revenue grew as well, with the $8.72 billion figure representing an 11% growth year over year. This was also a narrow overperformance, just ahead of the $8.715 billion consensus.
Perhaps more importantly, though, Salesforce reassessed its forecast for the remainder of the year. The company now sees revenue coming in between $34.75 billion and $34.8 billion (an 11% growth year over year).
Full-year profits got a slight lift as well, up 13 cents from the previous guidance. Earnings will likely come in around $8.18-$8.19 per share. Adjusted operating margin will improve to somewhere between 30%-33%.
While there’s a lot to be excited about as a CRM investor, CEO Marc Benioff remained cautiously optimistic on the earnings call yesterday. He said that there are opportunities everywhere for the company and that customers are becoming slightly less measured in their decision-making.
Still, Benioff warned that the challenging economic climate is not necessarily in the past. There will be continued headwinds in professional services, self-service, and in-period revenues in particular.
That being said, the stock is now up more than 23% in the past month. We’ve taken a deeper look at CRM through the VectorVest stock analysis software and uncovered 3 compelling reasons to consider buying this stock today.
CRM Has Excellent Upside Potential and Safety With Very Good Timing
VectorVest saves you time and stress while empowering you to win more trades through a simple, proprietary stock-rating system. You’re given clear, actionable insights in 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT).
Each sits on its own scale of 0.00-2.00, with 1.00 being the average. You’re offered a clear buy, sell, or hold recommendation for any given stock at any given time based on the overall VST rating, eliminating guesswork and emotion from your decision-making. Here’s what we found for CRM:
- Excellent Upside Potential: The RV rating draws a comparison between a stock’s long-term price appreciation potential (based on a 3-year price projection), AAA corporate bond rates, and risk. This offers much better insight than a simple comparison of price to value alone. As for CRM, the RV rating of 1.56 is excellent.
- Excellent Safety: The RS rating assesses a stock’s risk. It’s derived from a deep analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, price volatility, sales volume, and other factors. CRM has an excellent RS rating of 1.48 right now.
- Very Good Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year. As you can see from the stock’s recent performance, it has very good timing - as confirmed by the RT rating of 1.32.
The overall VST rating of 1.44 is excellent for CRM, and has earned the stock a BUY recommendation in the VectorVest system. Learn more about the current opportunity, including where to set your stop loss, in a free stock analysis today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. CRM is up more than 6% after delivering upbeat earnings and raising its full-year forecast. The stock has excellent upside potential and safety with very good timing pushing its price higher.
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