Software-as-a-Service (SaaS) provider Salesforce (NASDAQ:CRM) will report its first quarter Fiscal 2024 results on May 31, after the market closes. CRM has consistently beaten earnings expectations in the past eight quarters (see chart below), with a strategically built portfolio covering virtually all aspects of digital transformation. So far this year, the stock has gained 59.9%.
What to Expect from CRM Q1 Results
The Street expects Salesforce to post adjusted earnings of $1.61 per share, which is on the higher end of the company’s guidance and nearly double that of the Q1FY23 figure of $0.98 per share.
Similarly, the analysts expect Salesforce to post revenue of $8.18 billion, which is also on the higher end of the company’s outlook and represents a 10.4% year-over-year growth. However, sequentially, the revenue expectation shows a modest decline of 2.4%.
On May 26, Goldman Sachs analyst Kash Rangan reiterated his Buy rating on CRM stock ahead of its earnings report. Rangan has set a price target of $325, implying a massive 50.8% upside potential from current levels.
Rangan is highly optimistic about Salesforce’s quarterly winning streak and the potential tailwind from the artificial intelligence (AI) race. Even so, the analyst cited that this will be the first time that CRM will recognize a sequential decline in subscription revenue.
Despite that, Rangan noted, “As a system of record with a plethora of customer data that can help train its LLM (large language models), CRM can benefit from Generative AI. As the macro begins to inflect, we see CRM being well positioned as it realizes the benefits from sales efficiency efforts and workforce reductions of recent quarters.”
Is CRM a Good Buy?
On TipRanks, Salesforce has a Moderate Buy consensus rating based on 26 Buys, 11 Holds, and one Sell rating. The average Salesforce price target of $226.66 implies 5.2% upside potential from current levels.
