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There has been a noticeable change in the appetite for salesforce.com, inc. (NYSE: CRM) shares in the week since its annual report, down 12% to US $ 217. The result was overall positive – although revenues of US $ 21 billion were in line with what analysts had predicted, salesforce.com surprised with a statutory profit of $ 4.38 per share, slightly above expectations. This is an important time for investors, as they can follow a company’s performance in its report, take a look at what experts are forecasting for next year, and see if there has been a change in business expectations. ‘business. We put together the most recent statutory forecast to see if analysts have changed their earnings models as a result of these results.
Check out our latest review for salesforce.com
After the latest results, the 38 salesforce.com analysts are now forecasting US $ 25.7 billion in revenue in 2022. If achieved, that would reflect a substantial 21% improvement in sales over the last 12 month. Statutory earnings per share are expected to fall 86% to $ 0.62 over the same period. Prior to this earnings report, analysts were forecasting revenues of US $ 25.4 billion and earnings per share (EPS) of US $ 0.81 in 2022. So there has certainly been a drop in confidence after the last few years. results, noting the fairly significant reduction in the new EPS forecast.
It might come as a surprise to learn that the consensus price target has remained broadly unchanged at US $ 276, with analysts clearly hinting that the expected decline in earnings is unlikely to have much of an impact on valuation. It might also be instructive to look at the range of analysts’ estimates, to gauge the difference between outliers and the mean. There are different perceptions on salesforce.com, with the more bullish analyst valuing it at $ 320 and the most bearish at $ 200 per share. There are certainly different views on the stock, but the range of estimates is not wide enough to suggest that the situation is unpredictable, in our opinion.
Another way to view these estimates is in the context of a bigger picture, such as how the forecast compares to past performance and whether the forecast is more or less optimistic compared to other companies in the industry. Next year will bring more of the same, analysts say, with revenue forecast to grow 21%, in line with its 23% annual growth over the past five years. In contrast, our data suggests that other companies (covered by analysts) in a similar industry are expected to see their revenues grow by 13% per year. So while salesforce.com is expected to maintain its revenue growth rate, it is certainly expected to grow faster than the industry as a whole.
The bottom line
The biggest concern is that analysts have lowered their earnings per share estimates, suggesting that headwinds could be looming on salesforce.com. Fortunately, there have been no major changes to the revenue forecast, with business still expected to grow faster than the industry as a whole. There has been no real change in the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
That said, the company’s long-term profit trajectory is much bigger than next year. We have estimates – from several salesforce.com analysts – for 2026, and you can see them for free on our platform here.
That said, it is still necessary to consider the ever-present specter of investment risk. We have identified 3 warning signs with salesforce.com (at least 1, which is significant), and understanding them should be part of your investment process.
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