Salesforce Inventory Increases More Than 25% For Best Day Ever in “Explosive” Quarter

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Salesforce.com Inc. stock posted its best performance in a day on Wednesday after the cloud-based customer relationship management company celebrated several firsts and records, amid the worst global pandemic in a century.

At this rate, the stock will easily close a new all-time high and achieve its best performance in one day, surpassing its 19% gain to close at $ 6.65 on November 24, 2008. At last check, over 51 million shares traded hands, compared to the 52-week daily average of 5.9 million shares.
Of the 42 analysts who cover Salesforce, 38 have buy or overweight ratings, three have sustain ratings, and one has sell ratings. Of those, 27 analysts raised their price targets to an average price of $ 259.63, down from an average target price of $ 212.81 before earnings, according to FactSet data. Prior to that, at least nine analysts had raised their share price targets ahead of earnings. During Tuesday’s conference call, chief executive Marc Benioff said it was “humiliating” and “bittersweet” that the company produced record results, exceeding $ 5 billion in quarterly sales for the first time, amid the hardships and tragedies created by the COVID-19 pandemic. businesses need to adapt and digitally connect with their customers.
“We all want to get back to the situation, but the reality is that will never happen,” Benioff said on Tuesday’s call. “We are in a new world. We are in a fully digital world, with digital work, we live digitally, we educate digitally. “
While this world provides a kind of connection that would never have been possible 20 years ago, Benioff even admitted that isolation from the pandemic was taking its toll, with a third of the 54,000 Salesforce employees now working from home reporting a sort of mental health problem.
Cowen analyst J. Errick Wood, who has an outperformance rating and raised his price target to $ 270, called the second quarter a ‘boom’
Wood said management “appeared to be carrying a new level of trust with a huge increase in advice, a comment that new business growth is normalizing, and a discussion of how CRM is nimble to adapt to conditions.” “
On Tuesday, Salesforce raised its annual profit forecast to $ 3.72 to $ 3.74 per share, from a previous range of $ 2.93 to $ 2.95 per share, and to a range of $ 20.7 billion. to $ 20.8 billion, up from the previous $ 20 billion, for revenue. Analysts, who expected earnings of $ 2.97 per share on revenue of $ 20.01 billion, responded and raised their targets to an average of $ 3.58 per share on a turnover of business of $ 20.7 billion.
Wedbush analyst Dan Ives, who has an outperformance rating and raised his price target to $ 300, called the quarter a “masterpiece.”
Ives said that “Salesforce’s better-than-expected performance across the board signals a key pivot in business spending, which should have broader implications in the software industry.”
Other investors thought so as well as other cloud computing stocks joined the Salesforce rally, like the First Trust Cloud Computing ETF SKYY,
+ 3,39%
gains 3.4% and the iShares Expanded Tech-Software Sector IGV ETF,
+ 5,41%
rallied 5.2%. Notables included Adobe Inc. ADBE,
+ 9,09%
up 8%, ServiceNow Inc. NOW,
+ 6,50%
up 6%, WorkDay Inc. WDAY,
+ 10,09%
up 10%, Atlassian Corp. TEAM,
+ 6,00%
up 7%, Twilio Inc. TWLO,
+ 6,21%
up 7%, Splunk Inc. SPLK,
+ 6,44%
and boom the 6%, ZenDesk Inc. ZEN,
+ 6,35%
up 6%, Coupa Software Inc.
COUP,
+ 10,01%
up 10%, and Okta Inc. OKTA,
+ 6,97%
up 7%.
“Looking back, CRM has been one of the most successful technology providers in the world for the past decade, but it seems the company is finding a new tool for growth because we believe flawless execution and a cloud-accelerated COVID context go further. Said Ives of Wedbush.
Jefferies analyst Brent Thill, who has a buy rating and raised his price target to $ 285, called Tuesday’s Salesforce report a “monster beaten and increased.”
Thill said the accelerated growth in invoicing from Salesforce shows that the company’s product pipelines are actually improving amid the pandemic.
Thill said, “We believe, based on our calls with experts in the field, that cloud adoption will accelerate with the release of COVID-19, which should act as a growth-boosting LT tailwind. CRM. “
Analysts were also struck by the record improvement in Salesforce’s operating margin to 20% for the quarter.
Salesforce’s action was already gaining momentum before its earnings report. Less than 24 hours before the report, S&P Dow Jones Indices said the stock will replace Exxon Mobil Corp. XOM,
-2,12%
on the Dow Jones Industrial Average DJIA,
+ 0,29%
at the end of the month.
Salesforce shares are up 67% for the year, while the SKYY index is up 36% and the IGV index is up 39%.
This is compared to a 7.7% increase in the S&P 500 SPX index,
+ 1,02%,
and a 30% increase in the highly technological Nasdaq Composite Index COMP
+ 1,73%.
For the year, the Dow Jones is still down less than 1%.

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