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Digital Transformation to Boost Salesforce (CRM) Q3 Earnings

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Salesforce (CRM - Free Report) is slated to report third-quarter fiscal 2023 results on Nov 30. This cloud-based software maker’s third-quarter performance is likely to have benefited from the robust demand environment as customers are undergoing a major digital transformation.

Click here to know how CRM’s overall fiscal third-quarter results are likely to be.

Accelerated Digitalization to Boost Q3 Revenues

The rapid adoption of software-as-a-service-based platforms amid the ongoing hybrid working 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.

Salesforce’s ability to provide an integrated solution for customers’ business problems is expected to have been the key driver. 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, its focus on AI and the substantial progress in its Einstein Analytics platform make it optimistic about the upcoming quarterly results.

Salesforce Inc. Price and EPS Surprise

Salesforce Inc. Price and EPS Surprise

Salesforce Inc. price-eps-surprise | Salesforce Inc. Quote

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 and the ongoing Russia-Ukraine war might have affected Salesforce’s fiscal third-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.

Zacks Rank & Stocks to Consider

Salesforce currently carries a Zacks Rank #3 (Hold). Shares of CRM have declined 39.6% year to date (“YTD”).

Some better-ranked stocks from the broader technology sector are Celestica (CLS - Free Report) , Zscaler (ZS - Free Report) and Coupa Software (COUP - Free Report) . Celestica sports a Zacks Rank #1 (Strong Buy) at present, while Zscaler and Coupa 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 Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved up 9.4% to $1.86 per share in the past 30 days.

CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have increased 1.1% YTD.

The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 5 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved a penny south to $1.17 per share in the past 30 days.

ZS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 28.6%. Shares of the company have declined 56.8% YTD.

The Zacks Consensus Estimate for Coupa's fourth-quarter fiscal 2023 earnings has been revised 3 cents northward to 7 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved upward by a penny to 45 cents per share in the past seven days.

Coupa's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 478.1%. Shares of COUP have slumped 60.3% YTD.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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