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Salesforce (CRM - Free Report) stock soared about 12% during the key trading session on Thursday following the enterprise cloud computing solution provider’s reporting of better-than-expected financial results for the fourth quarter of fiscal 2023. The company’s upbeat guidance for the first quarter of fiscal 2024 also boosted investors’ confidence in the stock.
If this was not enough, the company announced an increase in its share repurchase authorization to $20 billion. The company is eyeing to improve efficiency and reduce cost of sales, marketing, and G&A. The stock had its best day since 2020 on Mar 2, per CNBC.
Inside Earnings
Salesforce’s fourth-quarter fiscal 2023 non-GAAP earnings doubled to $1.68 per share from the 84 cents reported in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $1.36. Salesforce’s quarterly revenues of $8.38 billion climbed 14% year over year, surpassing the Zacks Consensus Estimate of $7.99 billion. The top line also improved 17% in constant currency.
Strong Guidance for Q1 and FY24
For the fiscal first quarter, Salesforce projects total sales between $8.16 billion and $8.18 billion (midpoint $8.17 billion), which is higher than the Zacks Consensus Estimate of $8.09 billion at the midpoint.
Furthermore, CRM anticipates non-GAAP earnings per share in the band of $1.60-$1.61 for the current quarter, which is way higher than the consensus mark of $1.30.
For fiscal 2024, Salesforce forecasts revenues in the range of $34.5-$34.7 billion, which is more than the Zacks Consensus Estimate of $34.09 billion. The company projects fiscal 2024 non-GAAP earnings between $7.12 and $7.14 per share, which is higher than the consensus mark of $5.83 per share.
Other Initiatives
Alongside the earnings report, Salesforce said it’s working with Bain on a business review, and the company announced the removal of the board’s committee on mergers and acquisitions. That earned praise from prominent activist Elliott Management, which announced a stake in the company in January, per CNBC.
Upbeat Zacks Rank
The stock has a Zacks Rank #2 (Buy). The stock hails from the Zacks Industry that falls into the top 42% segment. Its Zacks Sector Rank too falls into the top 44% segment.
Against this backdrop, below we highlight a few ETF that are heavy on Salesforce and may benefit from the spike in its share price.
The underlying S&P North American Expanded Technology Software Index comprises of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries. The fund charges 40 bps in fees. Salesforce takes the top spot in the fund with about 9.6% weight.
First Trust Dow Jones Internet ETF (FDN - Free Report) – 5.27% Weight; Zacks Rank #2 (Buy)
The underlying Dow Jones Internet Composite Index includes only companies whose primary focus is Internet-related. The fund charges 51 bps in fees. Salesforce, Inc. takes the third spot in the fund with about 5.51% exposure.
The underlying Fidelity Cloud Computing Index reflects the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet. The fund charges 39 bps in fees. Salesforce, Inc. takes the first place in the fund with about 4.47% focus.
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Salesforce Surges Post Earnings: ETFs to Benefit
Salesforce (CRM - Free Report) stock soared about 12% during the key trading session on Thursday following the enterprise cloud computing solution provider’s reporting of better-than-expected financial results for the fourth quarter of fiscal 2023. The company’s upbeat guidance for the first quarter of fiscal 2024 also boosted investors’ confidence in the stock.
If this was not enough, the company announced an increase in its share repurchase authorization to $20 billion. The company is eyeing to improve efficiency and reduce cost of sales, marketing, and G&A. The stock had its best day since 2020 on Mar 2, per CNBC.
Inside Earnings
Salesforce’s fourth-quarter fiscal 2023 non-GAAP earnings doubled to $1.68 per share from the 84 cents reported in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $1.36. Salesforce’s quarterly revenues of $8.38 billion climbed 14% year over year, surpassing the Zacks Consensus Estimate of $7.99 billion. The top line also improved 17% in constant currency.
Strong Guidance for Q1 and FY24
For the fiscal first quarter, Salesforce projects total sales between $8.16 billion and $8.18 billion (midpoint $8.17 billion), which is higher than the Zacks Consensus Estimate of $8.09 billion at the midpoint.
Furthermore, CRM anticipates non-GAAP earnings per share in the band of $1.60-$1.61 for the current quarter, which is way higher than the consensus mark of $1.30.
For fiscal 2024, Salesforce forecasts revenues in the range of $34.5-$34.7 billion, which is more than the Zacks Consensus Estimate of $34.09 billion. The company projects fiscal 2024 non-GAAP earnings between $7.12 and $7.14 per share, which is higher than the consensus mark of $5.83 per share.
Other Initiatives
Alongside the earnings report, Salesforce said it’s working with Bain on a business review, and the company announced the removal of the board’s committee on mergers and acquisitions. That earned praise from prominent activist Elliott Management, which announced a stake in the company in January, per CNBC.
Upbeat Zacks Rank
The stock has a Zacks Rank #2 (Buy). The stock hails from the Zacks Industry that falls into the top 42% segment. Its Zacks Sector Rank too falls into the top 44% segment.
Against this backdrop, below we highlight a few ETF that are heavy on Salesforce and may benefit from the spike in its share price.
ETFs in Focus
iShares Expanded Tech-Software Sector ETF (IGV - Free Report) – 9.60% Weight of Salesforce; Zacks Rank #1 (Strong Buy)
The underlying S&P North American Expanded Technology Software Index comprises of North American equities in the software industry and select North American equities from interactive home entertainment and interactive media and services industries. The fund charges 40 bps in fees. Salesforce takes the top spot in the fund with about 9.6% weight.
First Trust Dow Jones Internet ETF (FDN - Free Report) – 5.27% Weight; Zacks Rank #2 (Buy)
The underlying Dow Jones Internet Composite Index includes only companies whose primary focus is Internet-related. The fund charges 51 bps in fees. Salesforce, Inc. takes the third spot in the fund with about 5.51% exposure.
Fidelity Cloud Computing ETF (FCLD - Free Report) – 5.27% Weight
The underlying Fidelity Cloud Computing Index reflects the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet. The fund charges 39 bps in fees. Salesforce, Inc. takes the first place in the fund with about 4.47% focus.