NEW YORK (TheStreet) -- Salesforce.com (CRM) - Get Report stock is up 8.05% to $67.53 in late-morning trading on Thursday, after the company reported a 2016 fourth quarter earnings beat and issuing guidance above analysts' estimates.
After yesterday's market close, the cloud-computing company announced that it expects 2017 first quarter per-share earnings to range between 23 cents and 24 cents, above estimates for 21 cents per share. Salesforce.com said that revenue should rise 25% from last year to a range between $1.885 billion and $1.895 billion. Wall Street is looking for revenue of $1.86 billion.
The bullish forecast comes even as rival technology companies such as Apple (AAPL) and Tableau Software (DATA) have warned that economic headwinds could weigh on the business.
Salesforce.com continues to assist companies such as Charles Schwab (SCHW) and Unilever (UL) to modernize their legacy technology systems and grant immediate access to information, CEO Marc Benioff toldTheStreet's Jim Cramer on CNBC's "Mad Money" last night.
The main takeaway from this quarter is that Salesforce.com is taking business from Oracle (ORCL) and SAP, Cramer explains in the above video.
The company has benefited as companies increasingly move toward cheaper and easier cloud-software services, and purchases of its web-based sales and marketing software have been growing, Reuters adds.
For the 2016 fourth quarter, Salesforce.com reported adjusted earnings of 19 cents per share on revenue of $1.81 billion, compared to analysts' estimates for earnings of 19 cents per share on revenue of $1.79 billion.
Insight from TheStreet Research Team:
I can't figure out if the strength of Salesforce.com's (CRM) quarter is a show of strength from founder and CEO Marc Benioff's company, or a show of weakness from Oracle(ORCL) and SAP (SAP), or a show of total ignorance by Wall Street traders and some of the research shops out there.
Yes it was a magnificent quarter, and it did come, in part, at the expense of SAP and Oracle -- who have to be losing business to the company simply because there isn't that much around.
But more importantly, at least to this stock jock, is that while the stock stood at about $80 in the thick of this quarter, it had traveled down to $53 right before the results were announced. And for that I blame bizarre guilt by association to Tableau Software (DATA) and LinkedIn (LNKD), which were true blow-ups of monstrous proportions. I think that Wall Street - both traders and analysts -- conflated the three, and nothing could have been more wrong.
I think many of these analysts are just guessing. If some had made just a few calls, they wouldn't have missed gigantic deals and a huge takeaway of business in Europe. Instead Saleforce blew it away right underneath many a nose, and in a spectacular fashion.
-Jim Cramer "Cramer: Why Analysts Were So Wrong About Salesforce.com" Originally Published on 2/25/2016 on Real Money.
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Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Salesforce.com's strengths such as its robust revenue growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures are countered by the fact that the company's cash flow from its operations has been weak overall.
You can view the full analysis from the report here: CRM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.