S&P 500   4,140.06 (-0.12%)
DOW   32,832.54 (+0.09%)
QQQ   320.96 (-0.25%)
AAPL   164.86 (-0.30%)
MSFT   280.53 (-0.84%)
META   170.47 (+2.01%)
GOOGL   117.41 (-0.05%)
AMZN   139.65 (-0.82%)
TSLA   870.77 (+0.72%)
NVDA   178.10 (-6.21%)
NIO   20.18 (-0.20%)
BABA   90.81 (-1.89%)
AMD   100.01 (-2.25%)
MU   61.45 (-1.62%)
T   18.00 (-1.91%)
CGC   3.28 (+21.48%)
GE   75.19 (+1.12%)
F   15.78 (+3.14%)
DIS   109.09 (+2.31%)
AMC   23.84 (+7.48%)
PYPL   96.27 (+1.00%)
PFE   49.33 (+0.12%)
NFLX   233.20 (+2.83%)
S&P 500   4,140.06 (-0.12%)
DOW   32,832.54 (+0.09%)
QQQ   320.96 (-0.25%)
AAPL   164.86 (-0.30%)
MSFT   280.53 (-0.84%)
META   170.47 (+2.01%)
GOOGL   117.41 (-0.05%)
AMZN   139.65 (-0.82%)
TSLA   870.77 (+0.72%)
NVDA   178.10 (-6.21%)
NIO   20.18 (-0.20%)
BABA   90.81 (-1.89%)
AMD   100.01 (-2.25%)
MU   61.45 (-1.62%)
T   18.00 (-1.91%)
CGC   3.28 (+21.48%)
GE   75.19 (+1.12%)
F   15.78 (+3.14%)
DIS   109.09 (+2.31%)
AMC   23.84 (+7.48%)
PYPL   96.27 (+1.00%)
PFE   49.33 (+0.12%)
NFLX   233.20 (+2.83%)
S&P 500   4,140.06 (-0.12%)
DOW   32,832.54 (+0.09%)
QQQ   320.96 (-0.25%)
AAPL   164.86 (-0.30%)
MSFT   280.53 (-0.84%)
META   170.47 (+2.01%)
GOOGL   117.41 (-0.05%)
AMZN   139.65 (-0.82%)
TSLA   870.77 (+0.72%)
NVDA   178.10 (-6.21%)
NIO   20.18 (-0.20%)
BABA   90.81 (-1.89%)
AMD   100.01 (-2.25%)
MU   61.45 (-1.62%)
T   18.00 (-1.91%)
CGC   3.28 (+21.48%)
GE   75.19 (+1.12%)
F   15.78 (+3.14%)
DIS   109.09 (+2.31%)
AMC   23.84 (+7.48%)
PYPL   96.27 (+1.00%)
PFE   49.33 (+0.12%)
NFLX   233.20 (+2.83%)
S&P 500   4,140.06 (-0.12%)
DOW   32,832.54 (+0.09%)
QQQ   320.96 (-0.25%)
AAPL   164.86 (-0.30%)
MSFT   280.53 (-0.84%)
META   170.47 (+2.01%)
GOOGL   117.41 (-0.05%)
AMZN   139.65 (-0.82%)
TSLA   870.77 (+0.72%)
NVDA   178.10 (-6.21%)
NIO   20.18 (-0.20%)
BABA   90.81 (-1.89%)
AMD   100.01 (-2.25%)
MU   61.45 (-1.62%)
T   18.00 (-1.91%)
CGC   3.28 (+21.48%)
GE   75.19 (+1.12%)
F   15.78 (+3.14%)
DIS   109.09 (+2.31%)
AMC   23.84 (+7.48%)
PYPL   96.27 (+1.00%)
PFE   49.33 (+0.12%)
NFLX   233.20 (+2.83%)

Don’t Bet On A Big Rebound For Salesforce.com Stock 

Don’t Bet On A Big Rebound For Salesforce.com Stock 
  • Salesforce.com’s slowing growth Is priced Into the market 
  • Company lowered its guidance for revenue due to FX headwinds
  • Stock trades at a high 34X its earnings which is double the average S&P 500

Salesforce.com (NASDAQ: CRM) had a great quarter and is on track to continue growing strongly at scale but there are several factors that we think will keep the price action from rebounding very strongly. The bottom line is this highly-valued company’s growth is not only slowing but comps are becoming increasingly difficult and there are no capital returns to lure new investors to the table. The stock trades at a high 34X its earnings which is double the average S&P 500 and the average S&P 500 company pays a dividend and buys back shares. In this scenario, we see the downtrend in Salesforce.com ending and a new trading range emerging. 

Salesforce.com Beats The Consensus But … 

Salesforce.com had a fantastic quarter and beat the Marketbeat.com consensus figures for Q1 results but the results and guidance are not that impressive relative to the consensus. The company reported $7.41 billion in net revenue for a gain of 24.3% over last year. The growth is great but down from higher levels in the preceding two quarters and only beat consensus by 40 basis points. The strength was driven by a 24% gain in the core Subscription and Service segment and compounded by a 30% gain in the much smaller Pro segment. 


Moving down to the income, the margins came in favorably with both the GAAP and adjusted operating margin above expectations. The bad news is that an adjusted margin of 17.6% led to $0.98 in adjusted earnings which is down $0.23 from last year and the guidance isn’t any better. 

The company lowered its guidance for revenue due to FX headwinds but raised its outlook for margin. The bad news here is that Q2 revenue and earnings are both expected to be below the consensus and for strength to build in the second half. The second half guidance assumes a marked improvement in both revenue and earnings and even here the news is mixed. The revenue guidance of $31.8 to $32.06 billion is below the market's expectation and there is risk in the earnings outlook. The range for earnings guidance is a dime above the consensus but flat to down from last year despite top-line growth and it assumes the company can control inflationary pressures. 

The Analysts Lower Their Price Targets For Salesforce.com 

The 40 analysts rating Salesforce.com have it pegged at a firm Buy and that has been steady over the past year but the price target is falling. There have been at least 9 major sell-side analysts out with commentary since the earnings release and none of the news is good in terms of the price target. While 2 of the 9 raised their price target all 9 of the new targets are below the current Marketbeat.com consensus price target and we see the consensus moving even lower. As it is, the consensus is down sharply in the 90 and 30-day comparisons and capping upside potential in the stock. 

The Technical Outlook: Salesforce.com Pops On Results

Salesforce.com shares popped more than 10% on the earnings news and guidance but we are not buying into the move yet. The gain suggests a bottom is in play but it is far too early to call it a bottom yet. Price action is still well below the 150-day EMA near $200 and a strong resistance target at $195. If the market can follow through on the premarket jump the next hurdles will be at those levels. A failure to move above either will most likely cap gains and keep the stock moving sideways until late in the summer and there is a possibility the market will move down to retest support as well. 

Don’t Bet On A Big Rebound For Salesforce.com Stock 

7 Blue-Chip Dividend Stocks That Won’t be Impacted by Rising Interest Rates

Stock markets move in cycles. Historically, bull markets last longer than bear markets, but both can last longer than investors expect. But inside bull markets and bear markets, there can still be volatile price changes in the opposite direction. And when the market does reverse direction, the biggest gains are made by investors that stay the course.

In a volatile market, one option for staying the course is to invest in quality blue-chip dividend stocks. Blue-chip stocks are companies that have a large market capitalization. That means there are companies in mature industries.

That maturity allows these companies to deliver consistent performance that is independent of whatever is happening with the country's monetary policy. When interest rates fall, these companies are poised for growth. And when interest rates rise, these companies have strong balance sheets that allow them to maintain pricing power and profits to provide stability.

All of this means that investors with lower risk tolerances can stay in the market without having to give up on growth. And in this special presentation, we're giving investors seven blue-chip names that investors can buy with confidence no matter what is happening with interest rates.

View the "7 Blue-Chip Dividend Stocks That Won’t be Impacted by Rising Interest Rates".

Free Email Newsletter

Complete the form below to receive the latest headlines and analysts' recommendations for your stocks with our free daily email newsletter:

Most Read This Week

Recent Articles

Search Headlines:

Latest PodcastFind Investing Opportunities For The Rest of 2022

Today, Kate’s guest is Rhys Williams, chief investment officer for the Opportunistic All Cap Equity, a long-short strategy at Spouting Rock Asset Management.

MarketBeat Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Privacy Policy | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer.