Can Salesforce Post 30% Growth This Quarter?

Salesforce.com, inc. CRM is scheduled to announce its first quarter financial results after the market closes on Wednesday and, according to Estimize, expectations point towards a 27 percent to 36 percent year-over-year growth in earnings.

For the current quarter, the company guided earnings of $0.14 per share. Wall Street analysts are modeling earnings in line with guidance, and revenue of $1.5 billion. The crowd projects earnings of $0.15 per share on revenue of $1.509 billion.

These figures compare to earnings of $0.11 per share on revenue of $1.23 billion reported in the first quarter of last year. However, the last couple of quarters have seen earnings come in at $0.14; this implies flat quarter-over-quarter earnings, although on higher revenue (see table below).

M&A & Results

In a report published Tuesday, analysts at Jefferies said they expect in-line earnings for the first quarter, with the enterprise business posting strong results: “We remain somewhat cautious regarding the company's efforts to further penetrate the enterprise with large deals on a consistent basis. In addition, recent M&A speculation could possibly hamper efforts to closing large strategic deals."

The firm reiterated an Underperform rating and a $49 price target.

Related Link: Analysts See Solid Q1 For Salesforce; Merger News Unlikely

Susquehanna maintained a Positive rating and an $80 price target. The analysts expect shareholders to be more focused on takeout related news than on the company's results.

The firm notes, "In fact, if CRM were to miss billings expectations, this could fuel more speculation that CRM would entertain a potential buyout and thus limit downside in the name. If CRM beats expectations, we think the combination of M&A attraction and strong demand conditions will keep interest in owning the stock at elevated levels."