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Salesforce Fair Value Now $76/Share

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In a report published Thursday, Brean Capital analysts maintained a Hold rating on salesforce.com, inc. (NYSE: CRM), while raising the fair value from $70 to $76, after the company reported robust 1Q results and raised its FY16 outlook.

Salesforce.com reported robust 1Q results, with better than-expected total reported billings and non-GAAP operating margins. The company's total revenue of $1.51 billion was largely in-line.

The company noted that the number of 7-figure-plus deals signed during the quarter were the highest ever for any of the first quarters and that 30 percent of the top deals were net new customers.

Salesforce.com's Services Cloud grew 38.3- percent year on year and its new Wave Analytics segment saw good early activity. "We were also pleased to hear management note that Wave Analytics is displacing legacy BI vendors, being used as a tier-two deployment, and also in entirely new instances where the company sees greenfield," the analysts mentioned.

The company has guided to in-line 2Q revenues and EPS, implying weaker-than consensus billings in the quarter. "We had suspected the company would guide conservatively, given the potential disruption from M&A chatter, and we continue to highlight the Reported Billings are not a useful metric on a quarterly basis," the analysts added.

Salesforce.com raised its FY16 revenue and EPS guidance from $6.475-$6.52 billion to $6.52-$6.55 billion and from $0.67-$0.69 to $0.69-$0.71, respectively.

Latest Ratings for CRM

DateFirmActionFromTo
Feb 2017NeedhamInitiates Coverage OnHold
Jan 2017Pivotal ResearchDowngradesBuyHold
Dec 2016Drexel HamiltonInitiates Coverage OnBuy

View More Analyst Ratings for CRM
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Posted-In: Brean CapitalAnalyst Color Price Target Reiteration Analyst Ratings

 

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