Salesforce, Inc. ($CRM) Earnings (Q2 FY23)

 Salesforce, Inc. ($CRM) Earnings and Opinion:


Salesforce is a company in the Technology sector and operates in the Software-Application industry. The company provides customer relationship management technology that brings companies and customers together worldwide. Salesforce was founded in 1999 and is currently headquartered in San Francisco, California. The company made its debut on the stock market in 2004. 

Salesforce Earnings Results:

  • Revenues of $7.72B beating expectations of $7.695B
  • Operating Income of $1.54B beating expectations of $1.43B
  • Adjusted EPS of $1.19 beating expectations of $1.03
  • Operating Cash Flow of $334M missing expectations of $645M
  • Guidance missed for both Q3 and FY23, with the exception of Operating Margin for FY23
Opinion:
Salesforce is currently moving lower after reporting earnings after the market closed this afternoon. The company saw some pretty nice beats on top line, but guidance is what is bringing the stock down. The executives didn't mention much to go along with the guidance. They did note that there was a "more measured buying environment". I think we are seeing this when we break down the RPO, billings, and deferred revenue. All of these metrics missed in the current quarter and are expected to miss in the next quarter as well. Basically, the numbers reported today don't define what is really going on in the company. Maybe Wall St. just has high expectations for the company. Overall, this isn't a horrible look for the company, and the trend may all change, if they are able to beat their guidance next quarter. For valuation, the P/E ratio sits at 170.77 which is way over the average. The P/S ratio is at 6.30, which is also way above the average. Revenue growth shows a steady decline over the next couple of years. Cash and debt are pretty much equal with each other, and the current ratio sits just above 1. In my opinion, this stock is extremely overvalued currently. The current ratio makes me a little worried too. I have never really had a lot of interest in this company. They struck some eyes when they had Matthew McConaughey premiere in a commercial for them during the Super Bowl. I think the business model is not too bad. CRM is such a vital component to businesses health. Although the ticker symbol is clever, that doesn't trick me into thinking otherwise. I am passing on this opportunity and looking elsewhere to invest. 


*Information from Yahoo Finance, CMLVIZ, Consensus Gurus, and Motley Fool

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