Salesforce.com Gets a Hold Rating from Pivotal Research

By Ryan Adsit

Pivotal Research analyst Brian Wieser maintained a Hold rating on Salesforce.com (NYSE: CRM) today and set a price target of $116. The company’s shares closed yesterday at $116.25, close to its 52-week high of $118.15.

Wieser said:

“We previously forecast +23.5% revenue growth for 4Q18 and adjusted margin of 13.3% vs. consensus of +22.5% and margins of 13.8%. Unbilled deferred revenue (representing business that is contracted but unbilled and off-balance sheet) ended the fourth quarter at approximately $13.3 billion, up 48% year-over-year. For the year the company ended up with revenue growing +24.9% and adjusted margins of 14.5%, which compared with 13.2% margins in the year-ago period. The company also provided more specific 2019 guidance, calling for 20-21% revenue growth, roughly consistent with our prior expectations slightly above this range and featuring operating income margin expansion of 125 to 150bps. 16.0%. However, EPS guidance for 2017 was better than our prior $1.89 estimate, in part on a lower-than-expected tax rate. Guidance calls for a $2.02 to $2.04 range, and our model’s new figure is slightly above this level.”

According to TipRanks.com, Wieser is a 5-star analyst with an average return of 10.9% and a 72.8% success rate. Wieser covers the Services sector, focusing on stocks such as Interpublic Group of Companies, Publicis Groupe SA, and Nielsen Holdings.

Salesforce.com has an analyst consensus of Strong Buy, with a price target consensus of $129.79.

Based on Salesforce.com’s latest earnings report for the quarter ending October 31, the company posted quarterly revenue of $2.68 billion and quarterly net profit of $51.39 million. In comparison, last year the company earned revenue of $2.29 billion and had a GAAP net loss of $51.44 million.

Based on the recent corporate insider activity of 444 insiders, corporate insider sentiment is negative on the stock.

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salesforce.com, inc. is a customer relationship management company, which engages in the provision of enterprise software.