Should I buy Salesforce shares after Q1 results?

Salesforce.com, inc. (NYSE: CRM) shares have weakened from $256.70 to $154.55 since the beginning of January 2022, and the current price stands at $178.45.

Investment firm Wedbush has a positive view of the shares of this company, and it reported that Salesforce’s outlook looks relatively healthy despite fears of much darker macroeconomic matters.

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Analysts have a positive view of Salesforce’s outlook

Salesforce is an American cloud-based software company that provides customer relationship management service and enterprise applications focused on customer service, marketing automation, analytics, and application development.

Salesforce reported better than expected first-quarter results on May 31; total revenue has increased by 24.3% Y/Y to $7.41 billion, while the non-GAAP earnings per share were $0.98 (beats by $0.04).

First-quarter non-GAAP operating margin was 17.6%; Salesforce generated $3.68 billion in cash from operations during the quarter and ended the period with $13.5 billion in cash.

Marc Benioff, CEO of the company, said that Salesforce hasn’t seen “any greater impact” from the worldwide economic situation that continues to deal with the war between Russia and Ukraine, rising inflation, supply chain issues, and Covid-related shutdowns in parts of China.

Salesforce is continuing to be one of the fastest-growing enterprise software companies in history, and the digital transformation trends that accelerated during the pandemic are moving full steam ahead.

The company’s management expects revenue to be between $7.69 billion and $7.70 billion for the second fiscal quarter, while the earnings per share should be around $1. Revenue for the full fiscal year should be around $31.8 billion, and earnings per share should be approximately $4.7 per share.

Richard Baldry, an analyst from Roth Capital, increased his rating on Salesforce’s shares in anticipation that its business will continue to improve in the year’s second half. Richard Baldry upgraded shares to “buy” from “neutral” with the price target of $242 per share.

Wedbush Securities analyst Dan Ives, continues to keep outperform rating with a target price of $225 as Salesforce’s outlook looks relatively healthy despite fears of much darker macroeconomic matters.

Citigroup reported that the strong first-quarter results came despite foreign exchange headwinds, while Bank of America analyst Brad Sills said that renewed discipline on operating expenses should help drive meaningful margin expansion for Salesforce.

Technical analysis

Salesforce’s stock price has fallen more than 25% since the beginning of January 2022, and the current price stands at $178.45.

The strong support level stands at $150, and if the price falls below it, the next target could be $125.

On the other side, if the price jumps above the $200 resistance, it would signal trading shares, and the next target could be at $220 or even above.

Summary

Salesforce reported better than expected first-quarter results on May 31, and Marc Benioff, CEO of the company, said that Salesforce hasn’t seen “any greater impact” from the worldwide economic situation. Roth Capital, Wedbush Securities, Citigroup, and Bank of America positively view Salesforce’s outlook despite fears of much darker macroeconomic matters.

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