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Rapid Cloud Adoption to Drive Salesforce's (CRM) Q3 Earnings
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Salesforce (CRM - Free Report) is slated to report third-quarter fiscal 2024 results on Nov 29. The cloud-based software maker’s third-quarter performance is expected to have benefited from the positive demand environment as customers are continuing with cloud migration and digital transformation initiatives despite the current macroeconomic headwinds.
Click here to know how CRM’s overall fiscal third-quarter results are likely to be.
Cloud Adoption to Drive Q3 Revenues
The rapid adoption of software-as-a-service-based platforms amid the ongoing hybrid working trend is expected to have spurred the demand for Salesforce’s cloud-based solutions. The enterprise software maker’s diverse cloud offerings are likely to have helped expand its clientele, fueling the top line.
Moreover, the growing demand for generative artificial intelligence (AI)-enabled cloud-based solutions is anticipated to have aided top-line growth in the third quarter. Salesforce is currently focusing on incorporating generative AI tools across its products as it looks to keep its business ahead of rivals. Its focus on AI and the substantial progress in its Einstein Analytics platform make us optimistic about the upcoming quarterly results.
The company’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. Additionally, Salesforce’s ability to provide an integrated solution for customers’ business problems is expected to have been the key driver.
However, a decline in software spending by small and medium businesses amid ongoing macroeconomic headwinds and geopolitical issues may have affected Salesforce’s fiscal third-quarter performance. On the second-quarter fiscal 2024 conference call, CRM had stated that customers are scrutinizing every deal, and it is witnessing an elongated deal cycle and deal compression. Our estimate for the Subscription and Support segment’s third-quarter revenues is pegged at approximately $8 billion.
Salesforce also revealed that its professional service business has been seeing less demand for multi-year transformation deals as well as project delays in some cases. Our estimate for the Professional Services segment’s third-quarter revenues is pegged at approximately $701.8 million.
Furthermore, stiff competition from Oracle and Microsoft is a concern, along with forex headwinds.
Zacks Rank & Stocks to Consider
Salesforce currently carries a Zacks Rank #3 (Hold). Shares of CRM have soared 59.7% year to date (YTD).
The Zacks Consensus Estimate for Intel’s fourth-quarter 2023 earnings has moved north 10 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 30 cents to 91 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 136.3%. Shares of INTC have surged 64.9% year to date.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has moved north 14 cents to $1.49 per share in the past 30 days. The consensus estimate for fiscal 2024 earnings has increased 5 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative surprise of 32.3%. Shares of AZPN have dropped 10.4% year to date.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has moved north 9 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 19 cents to $1.51 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 28.6%. Datadog shares have rallied 52.3% year to date.
Image: Bigstock
Rapid Cloud Adoption to Drive Salesforce's (CRM) Q3 Earnings
Salesforce (CRM - Free Report) is slated to report third-quarter fiscal 2024 results on Nov 29. The cloud-based software maker’s third-quarter performance is expected to have benefited from the positive demand environment as customers are continuing with cloud migration and digital transformation initiatives despite the current macroeconomic headwinds.
Click here to know how CRM’s overall fiscal third-quarter results are likely to be.
Cloud Adoption to Drive Q3 Revenues
The rapid adoption of software-as-a-service-based platforms amid the ongoing hybrid working trend is expected to have spurred the demand for Salesforce’s cloud-based solutions. The enterprise software maker’s diverse cloud offerings are likely to have helped expand its clientele, fueling the top line.
Moreover, the growing demand for generative artificial intelligence (AI)-enabled cloud-based solutions is anticipated to have aided top-line growth in the third quarter. Salesforce is currently focusing on incorporating generative AI tools across its products as it looks to keep its business ahead of rivals. Its focus on AI and the substantial progress in its Einstein Analytics platform make us optimistic about the upcoming quarterly results.
Salesforce Inc. Price and EPS Surprise
Salesforce Inc. price-eps-surprise | Salesforce Inc. Quote
The company’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. Additionally, Salesforce’s ability to provide an integrated solution for customers’ business problems is expected to have been the key driver.
However, a decline in software spending by small and medium businesses amid ongoing macroeconomic headwinds and geopolitical issues may have affected Salesforce’s fiscal third-quarter performance. On the second-quarter fiscal 2024 conference call, CRM had stated that customers are scrutinizing every deal, and it is witnessing an elongated deal cycle and deal compression. Our estimate for the Subscription and Support segment’s third-quarter revenues is pegged at approximately $8 billion.
Salesforce also revealed that its professional service business has been seeing less demand for multi-year transformation deals as well as project delays in some cases. Our estimate for the Professional Services segment’s third-quarter revenues is pegged at approximately $701.8 million.
Furthermore, stiff competition from Oracle and Microsoft is a concern, along with forex headwinds.
Zacks Rank & Stocks to Consider
Salesforce currently carries a Zacks Rank #3 (Hold). Shares of CRM have soared 59.7% year to date (YTD).
Some better-ranked stocks from the broader technology sector are Intel Corporation (INTC - Free Report) , Aspen Technology, Inc. (AZPN - Free Report) and Datadog, Inc. (DDOG - Free Report) . Intel sports a Zacks Rank #1 (Strong Buy) at present, while Aspen and Datadog 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 Intel’s fourth-quarter 2023 earnings has moved north 10 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 30 cents to 91 cents in the past 30 days.
Intel's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 136.3%. Shares of INTC have surged 64.9% year to date.
The Zacks Consensus Estimate for Aspen's second-quarter fiscal 2024 earnings has moved north 14 cents to $1.49 per share in the past 30 days. The consensus estimate for fiscal 2024 earnings has increased 5 cents to $6.63 per share in the past 30 days.
Aspen's earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average negative surprise of 32.3%. Shares of AZPN have dropped 10.4% year to date.
The Zacks Consensus Estimate for Datadog's fourth-quarter 2023 earnings has moved north 9 cents to 43 cents per share in the past 30 days. The consensus estimate for 2023 earnings has increased 19 cents to $1.51 per share in the past 30 days.
DDOG’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 28.6%. Datadog shares have rallied 52.3% year to date.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.