Tech stocks have done particularly well over the past 12 months. While most sectors have reported massive stock growth this past year, this is especially true for companies involved in either remote work, cloud computing, or work-at-home related services. One company that vaguely falls into that category is Salesforce (NASDAQ: CRM). As it turns out, the cloud service provider reported its best-ever first-quarter results in its entire history, wowing investors and analysts alike.
The company reported that its Q1 revenues came in at $5.96 billion, more than 23% higher than last year’s first quarter. Net income came in at $469 million, almost five times as high as last year’s $52 million. Salesforce’s financial figures are improving all across the board, with the only exception being total expenses, which are up slightly this year. Considering these past two earning seasons have been exceptional, most investors were expecting promising results from Salesforce.
“We had the best first quarter in our company’s history. With incredible momentum throughout our core business, we’re raising our revenue guidance for this fiscal year by $250 million to approximately $26 billion and non-GAAP operating margin to 18 percent. We’re on our path to reach $50 billion in revenue in FY26,” said CEO Marc Benioff in a press release.
Salesforce also raised its guidance for the rest of the year. The company expects revenue to rise to $6.22 billion in the next three months. That’s once again edging out over most analysts predictions, which were expecting something closer to just $6.0 billion for Q2 2021.
Perhaps the biggest thing going for Salesforce this year is its pending acquisition of Slack. The company will pay out around $27.7 billion for the remote-working app, with the transaction expected to close during the second quarter of this year. According to Salesforce’s estimates, Slack will add an extra $500 million in revenue for the entire year, although that is a tad bit lower than what most were expecting.
Shares of Salesforce are up 4.3% in response to the news. Despite having the best quarter in history and a pretty strong year in general, shares haven’t really done as well as one might expect. Compared to last year, Salesforce stock is up around 25%. While that seems pretty good, that’s actually matching the Nasdaq’s performance over the past 12 months as well.
Despite what could be considered underwhelming stock performance over the past 12 months, most analysts covering Salesforce are incredibly bullish right now. Thirty-six analysts have a buy rating. Nine are neutral, while no one on Wall Street is at all bearish right now. While Salesforce is looking better than ever, long-term tech investors have other stocks that have done just as well, if not better, and are less pricey in terms of their valuations.
Salesforce Company Profile
Salesforce.com provides enterprise cloud computing solutions, including Sales Cloud, the company’s main customer relationship management software-as-a-service product. Salesforce.com also offers Service Cloud for customer support, Marketing Cloud for digital marketing campaigns, Commerce Cloud as an e-commerce engine, the Salesforce Platform, which allows enterprises to build applications, and other solutions, such as MuleSoft for data integration. – Warrior Trading News
