Deutsche Bank On Salesforce Upcoming Earnings: Expect Solid, Not Blowout Quarter

Analysts at Deutsche Bank released an earnings preview on Salesforce.com CRM ahead of the release of its second quarter results on August 20.

Analyst Karl Keirstead, conducted various checks within the Salesforce eco-system to better understand recent developments. Keirstead said that the company's guidance for sequentially flat deferred revenues in the quarter implies a projected billings growth of 27 percent. However, he projects a billings growth of 29 percent.

According to Keirstead, the consensus among investors is for organic billings growth of 22 percent to 24 percent. Shares will likely see upside if the company reports organic billings growth of at least 25 percent.

“The consensus from our checks was that Salesforce's momentum and deal pipeline remains strong, with no material change in deal sizes and a continued strong demand for related implementations services work,” the analyst wrote in his note.

According to Keirstead, one check revealed there was “none of the usual summer slowdown,” another check said that deal closes were “a bit protracted in June and early July but rebounded at quarter close.” Another check cited some slowdown over the previous few months.

Based on the checks, Keirstead believes that Salesforce will report a “solid” quarter, but not a “blowout.”

Keirstead adds that Salesforces' new President Keith Block is doing an “excellent job” in driving growth and making results more predictable.

Shares are Buy rated with a $65 price target.