Salesforce.com Beats Street 2Q Forecasts

Needham & Company LLC increased their price objective on shares of salesforce.com, inc. from $80.00 to $85.00 and gave the company a “buy” rating in a report on Friday, May 22nd.

The company also reported a second-quarter unbilled deferred revenue, representing the business that is contracted but unbilled and off balance sheet, of $6.2 billion, up 24 percent from previous year of the same period. If Salesforce successfully leverages its strength in the CRM market to expand into industry verticals, it may be able to extend its annual revenue growth of over 20% consistently over the medium term. Cash from operations rose to $1.03 billion in the first half of Salesforce’s fiscal year, from $719 million a year earlier.

Subscription and support revenues were US$1.52 billion, an increase of 23pc year-over-year.

Salesforce posted level profit at 0 pennies for every offer on a GAAP premise contrasted with a year ago’s loss of 10 pennies for every offer.

For the third quarter, Salesforce expects to earn an adjusted EPS in the range of 18-19 cents compared to a consensus estimate 18 cents.

The company again lifted its outlook for 2016, sending its shares up 5 percent in after-hours trade on the New York Stock Exchange.

Cloud computing services provider salesforce.com, inc.

Our price estimate of $65 for Salesforce.com is about 5% lower than its current market price. And I think that is reflected in their license revenue growth, which has been poor, and then their movement to the cloud has been stunted because they don’t want to shift those customers into new models.

Professional services and other revenues were US$113 million, an increase of 32pc year-over-year. Wall Street Brokerage Firms have recommended on the company shares.

CEO Marc Benioff didn’t mince words in the conference call yesterday, boasting that the second quarter of fiscal 2016 was the best quarter CRM had ever had.

Companies who have built platforms like Salesforce deliver world-class growth like we’re doing in this quarter. Moreover, strategic acquisitions and the resultant synergies are expected to benefit over the long run. The Organization targets customer relationship management (NYSE:CRM).

While much of those gains were driven by speculation that CRM could be bought out by a larger rival – Microsoft (MSFT), Oracle (ORCL) and IBM (IBM) were all floated as potential acquirers – hopes for a deal have since waned. Moreover, currency fluctuations and increase in investments in global expansions and data centers could impact the near-term results.