Shares of salesforce.com, inc. CRM plunged more than 6 percent after calculated billings and third quarter guidance were below what many analysts were expecting.
According to Tom Roderick of Stifel, Salesforce's billings and guidance miss "hardly seems like the beginning of the end."
Specifically, Salesforce guided its total revenue and non-GAAP earnings per share to a range of $2.11 billion to $2.12 billion and $0.20 to $0.21. This was short of the consensus estimate of $2.124 billion and $0.24 per share.
The analyst noted that the Brexit vote and subsequent plunge in the British pound was the primary driver behind the company's largest quarter-over-quarter deferred revenue headwind in its history. Moreover, management alluded to some softness in the domestic market during the final few weeks of July.
Roderick continued that all things considered, he remains "positive" on Salesforce's story which was highlighted by the closing of a major 9-digit deal in the quarter. The analyst also highlighted the "increasingly seasonal nature" of Salesforce's business due to the timing of its annual Dreamforce conference as well as the "relative scale" of Enterprises the company engages with.
Shares remain Buy rated with an unchanged $93 price target.
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