Shares of Salesforce soared 13.5% in the extended trading session on Tuesday after the company reported better-than-expected 2Q results and lifted its outlook for fiscal 2021.
Salesforce’s (CRM) 2Q revenues climbed 29% to $5.15 billion year-on-year and surpassed analysts’ expectations of $4.9 billion. The on-demand software and solution provider’s adjusted EPS jumped 118% to $1.44 and beat Street estimates of $0.67. The company is benefiting from the rapid adoption of cloud-based solutions and ongoing digital transformations.
The company raised its fiscal 2021 revenue outlook to $20.7-$20.8 billion from $20 billion projected earlier. The enterprise cloud computing solutions provider also revised the full-fiscal adjusted EPS guidance range to $3.72-$3.74, up from the previous forecast of $2.93-$2.95. (See CRM stock analysis on TipRanks).
Wedbush analyst Daniel Ives initiated coverage on Salesforce with a Buy rating and price target of $250 (15.7% upside potential). Ives said, “despite near-term COVID-19 headwinds, Salesforce’s secular drivers remain intact and over the next decade we believe Salesforce is poised to capture significant digital transformation spend which should help the company march towards its $35B revenue target (FY24).”
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 22 Buys, 2 Holds, and 2 Sells. Given the year-to-date stock price increase of about 33%, the average price target of $208.40 now implies downside potential of about 3.5% from the current level.
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