Salesforce Earnings: Is the Stock a Buy, Sell, or Hold?
May 30, 2021 12:15 PM GMT-4 USD
Salesforce reported another good quarter of revenue and profitability with margin expansion.
Salesforce.com, Inc. (CRM) reported its fiscal first-quarter 2022 financial results after the market closed on Tuesday, May 30, 2021. The company reported revenue of $5.96 billion, up 23% year-over-year and above the consensus estimate of $5.86 billion. Non-GAAP earnings per share were $0.98, up 45% year-over-year and above the consensus estimate of $0.93.
Salesforce's revenue growth was driven by strong demand for its cloud-based software products. The company's subscription revenue, which accounted for 92% of total revenue, grew 24% year-over-year to $5.48 billion. Salesforce's operating margin expanded by 2.2 percentage points year-over-year to 18.1%. This margin expansion was driven by a combination of revenue growth and cost controls.
Salesforce's financial results were well-received by investors. The company's stock price rose 5% in after-hours trading.
After Earnings Is Salesforce Stock a Buy, a Sell, or Fairly Valued?
Salesforce's strong earnings report has led to some analysts to upgrade their ratings on the stock. However, other analysts believe that the stock is fairly valued or even overvalued.
Ultimately, the decision of whether to buy, sell, or hold Salesforce stock is a personal one. Investors should consider their own investment goals and risk tolerance before making a decision.
Here are some factors to consider when making a decision:
- Salesforce's strong revenue growth is expected to continue in the future. The company is benefiting from the growing demand for cloud-based software products.
- Salesforce's operating margin is expected to continue to expand. This will help to boost the company's profitability.
- Salesforce's stock is trading at a premium valuation. Investors should be aware that the stock could be volatile in the short term.
Overall, Salesforce is a well-run company with a strong track record of growth and profitability. However, investors should be aware that the stock is trading at a premium valuation. Investors should consider their own investment goals and risk tolerance before making a decision.
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