Salesforce (NYSE:CRM) is set to post second quarter results on Wednesday, and investors would like to see the enterprise software giant bounce back after a disappointing performance during the last quarter.
Wall expects the San Francisco-based company to post EPS of $2.36, implying a rise of 11.3%, while revenue is expected to grow 7.3% at $9.23 billion.
Earlier in May, Salesforce posted fiscal first-quarter results and guidance that missed estimates, with the company blaming “elongated deal cycles, deal compression and high levels of budget scrutiny during the quarter.”
While analysts continue to see a soft client spending amid a tough environment, they are still expecting the company to meet Wall Street expectations for the quarter.
“While there is clearly still some disruption in the field, we believe overall CRM should be able to meet and potentially exceed Street expectations with some improvement in the field,” said Wedbush analyst Dan Ives.
Citi analyst Tyler Radke reiterated the sentiment, saying service cloud demand is healthy but warned that there are some concerns about the back half of the year.
“In Q2, we can expect strength from the company from Salesforce Einstein, accretion from its recent acquisitions, growth from its data management and cloud services, and further benefits from its cost restructuring,” noted Seeking Alpha analyst Oliver Rodzianko.
Over the last two years, CRM has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.
Seeking Alpha analysts and Wall Street are bullish and rated the stock a Buy. However, Seeking Alpha’s Quant rating are cautious and consider it a Hold, with a score of 3.39 out of 5, mostly dragged down by the valuation factor.
Over the last three months, EPS estimates have seen eight upward revisions, compared to 28 downward revisions, while revenue estimates have been revised upwards once versus 33 downward moves.
The stock has gained nearly 1% so far this year, compared to the about 18% rise in the broader S&P500 Index.
