Salesforce (NYSE:CRM) is set to report its third quarter earnings on Wednesday after markets close.
Wall Street expects the San – Francisco, California -based company to post Earnings Per Share (EPS) of $2.06, implying a rise of 47.1%, while revenue is expected to rise 11.2% to $8.72 billion.
Growth at the cloud computing firm has come under pressure as businesses tightened their spending to weather the impact from rising costs and an economic slowdown, while deep-pocketed legacy vendors including Microsoft and Amazon gave intense competition.
However, the Marc Benioff-led company shifted its focus towards AI-powered offerings following other technology companies incorporating their tools with generative AI to capitalize on the ongoing trend.
“We think that leveraging generative AI on Data Cloud will lead to customers realizing higher value from Salesforce solutions, which is ultimately a driver of multi-cloud adoption and revenue growth,” said BMO analyst Keith Bachman.
Brokerage Monness, Crespi, Hardt believes the business software firm will meet its third-quarter revenue and EPS estimates, benefitting from cost cuts and global price hikes.
Along with guidance, investors will also focus on Salesforce’s margin and cost control, especially after the company said that it is looking to reduce costs by $3 billion to $5 billion.
Over the last two years, Salesforce has beaten both revenue and EPS estimates 100% of the time.
Wall Street is bullish on the stock with Seeking Alpha’s Quant rating considering it a “strong buy”, while Seeking Alpha analysts and Wall Street rate the stock a “buy”.
Shares of the company behind workplace-messaging tool Slack have gained over 60% so far this year.
Over the last three months, EPS estimates have seen 37 upward revisions, compared to no downward revision. Revenue estimates have seen 30 upward revisions versus six downward moves.
