BTIG Affirms salesforce.com (CRM) at 'Buy'; Q2 Results May Draw Questions, but L-T Targets Remain in Focus
- Stocks dip as earnings pour in, consumer discretionary lags
- UPDATE: Alphabet (GOOG) Tops Q3 EPS Views; Revs Strong
- Baker Hughes (BHI), General Electric (GE) in Partnership Talks, Not Merger Talks
- Cirrus Logic, Inc. (CRUS) Q2 Results and Guidance Beat Estimates
- Amazon.com (AMZN) Misses Q3 EPS by 26c, Offers Q4 Guidance
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
BTIG affirms salesforce.com (NYSE: CRM) at Buy with a price target of $100 following the company's Q2 results on Wednesday night.
Analyst Joel Fishbein noted,
While Salesforce delivered an in-line 2Q print on most metrics, investors will debate the full implications of the underwhelming billings performance and guidance. Specifically, billings grew only +15% y/y, with softness in the U.S. driving the first mid-teens growth rate since F1Q14. Similarly, guidance implies further billings deceleration to +12% y/y in F3Q. We think this can partly be attributed to the seasonality of the business, as 1Q and 3Q typically show the largest sequential declines, while the post-Dreamforce 4Q notably outperforms with the strongest growth of the year.
Fishbein also said,
All eyes shift to Dreamforce in early October with the release of Einstein and discussion around long-term targets. The company has invested heavily in artificial intelligence (six deals in the past 12 months), and they believe imbuing their platform with machine learning will be the next catalyst for sustained growth. From a numbers perspective, the company did raise its revenue guidance a bit, implying ~25% y/y growth. Longer term, despite the billings deceleration, we’re comfortable with our 21% revenue CAGR and 19% billings CAGR over the next three years. We believe near term that innovations (the introduction of Einstein) will drive better growth in the U.S., just as international growth rates (~25% of the business) accelerate into the low-30%s (on a constant currency basis).
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Rosenblatt Upgrades NETGEAR (NTGR) to Buy
- Jefferies Raises Price Target as Cheesecake Factory (CAKE) Posts 3Q Beat
- Jefferies Raises Price Target on Exelon Corp. (EXC) Following 3Q EPS Beat
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!