This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here Pops: What Wall Street's Saying

Updated from 8:36 a.m. to include thoughts from Oppenheimer analyst.

NEW YORK (TheStreet) –– (CRM - Get Report) continued to show there is life in the software-as-a-service (SaaS) business, as fiscal second-quarter revenue rose 38% year over year, curbing some doubt on Wall Street. earned an adjusted 13 cents a share on the quarter on $1.29 billion in revenue, as subscription and support revenue rose 37% year over year to $1.23 billion. Analysts surveyed by Thomson Reuters were expecting an adjusted profit of 12 cents a share on $1.29 billion in revenue.

Shares of the San Francisco-based company were higher in early trading on Friday, gaining 8.1% to $60.24.

The Marc Benioff-led company boosted its fiscal 2015 revenue guidance, saying it now expects to generate between $5.34 billion and $5.37 billion. Adjusted earnings are projected to be between 50 cents and 52 cents a share. Analysts expect the company to earn 51 cents a share on $5.34 billion in revenue.

For the third quarter, Salesforce expects to post adjusted earnings between 12 cents and 13 cents a share, with revenue ranging between $1.365 billion and $1.37 billion. Analysts expect adjusted earnings of 13 cents on revenue of $1.37 billion.

Following the report and the earnings call, analysts were largely positive on Salesforce. Here's what a few of them had to say:

Barclays Capital analyst Raimo Lenschow (Overweight, $63 PT)

" reported Q2 FY15 results that were better than consensus, with revenue of $1.32bn coming in above expectations of $1.29bn. Billings of $1.35bn on a reported basis was ahead of consensus estimates and backlog growth (32% y/y) also remains healthy. Generally speaking, we feel as though the quarter was fine. Shares showed modest upward price movement in after-hours trading, however, with SaaS stocks still under pressure and investor sentiment towards high-valuation names remaining tentative, we do not think this result will cause a big move to the upside in the near term for"

UBS analyst Brent Thill (Buy, $76 PT)

"Once again, CRM's durable business model provided ongoing consistency and results. Despite Q2 being a seasonally soft quarter, CRM saw stronger than expected large deal volume as evidenced by an 8-figure win at 3M (displaced Oracle/Siebel) and numerous other unannounced transactions. Trading at 5.6x forward CY15 EV/Rev and 3.5x est. total backlog, we believe there's meaningful upside to CRM shares as we head into the seasonally strong second half, where we believe: (1) large enterprise deal pipeline is robust, (2) breadth of volume deals in SMB provides balance, (3) there are upcoming event catalysts (2 major user conferences: ET Connections in September and Dreamforce in October), where we expect new product announcements and new partner & customer wins. Maintain Buy rating."

Deutsche Bank analyst Karl Keirstead (Buy, $70 PT)

" (SFDC) grew billings by 33% in 2QF15 (we estimate organic ex- ET billings growth of ~28%), versus what we believe to have been investor expectations for ~30%-32% growth. Total backlog growth was solid at 32% (consistent with momentum in recent quarters), the FY15 revs guidance was raised by $30m (normal) and very strong OCF growth of 54% in the first half makes SFDC's FY15 OCF growth guidance of 26%-27% look very conservative. The key to the print was the October quarter DR guide of 30%, implying 25%+ billings growth (all organic given the ET deal has now been lapped). Reaffirm BUY rating."

Pacific Crest Securities analyst Brendan Barnicle (Outperform, $74 PT)

"SaaS has had a generally disappointing Q2, but once again proved itself the SaaS leader. The company's FQ2 (July) results exceeded all expectations, and generally grew all metrics by 30% or more. Revenue was $1.32 billion, accelerating to 38% y/y growth and better than expectations of $1.29 billion. EPS was $0.13, better than expectations of $0.12. Billings were $1.35 billion, up 33% and better than expectations of $1.29 billion. Similarly, cash flow from operations was $246 million, up 34% and better than expectations of $201.2 million. Given the continued momentum in the business, the company raised guidance and we are increasing estimates."

Oppenheimer analyst Brian Schwartz (Outperform, $71 PT)

"Consistent with our preview, CRM reported 2Q upside with higher consensus estimates following through. Our model suggests the billings and revenue guidance for 3Q/2H (and hence FY:2016) still has upside potential given historical trends and the encouraging progress with newer products. Bottom Line: A key part of our CRM thesis is that new sales leadership will become a tailwind for financials as enterprise penetration increases and marketing and platform become a bigger share of the revenue mix. 2Q results suggest this may be in the early stages of playing out. While's strength in SFA/Service is likely reflected in the shares, the company's success in marketing and platform, along with newer financial discipline around operating margins, could be a source of revenue upside and multiple expansion."

-- Written by Chris Ciaccia in New York

>Contact by Email.

Follow @Chris_Ciaccia

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CRM $75.80 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs