Daily Brief - Salesforce's Earnings Outlook

TLDR: As Salesforce prepares to unveil its Q4 Fiscal Year 2024 earnings, the anticipation builds not just for a return to profitability but for a glimpse into the future shaped by AI and data cloud innovations.

Expected to report a net income of $1.26 billion, reversing from last year's losses, Salesforce's journey back to black ink underscores a strategic recalibration paying off.

With diluted EPS predicted at $1.29 and revenues aiming for a historic peak of $9.2 billion, the spotlight intensifies on Salesforce's evolving growth narrative, despite this marking its slowest revenue ascent since going public.

It's noteworthy that Toggle's analysis reveals a trend where CRM stock often experiences an uptick in returns following an earnings surpass. Historically, the stock has shown its highest median returns one month post-earnings announcement.

The narrative around Salesforce's resurgence is incomplete without the mention of Einstein GPT and the burgeoning data cloud sector, now the fastest-growing within its portfolio.

This leap towards AI-powered enterprise solutions reflects not just a response to global demand but a bold stride towards redefining customer relationship management.

Market Movers: If CRM beats earnings estimates?

Here is the historical response from Salesforce peers on 1-month basis, based on previous earnings beats:

1. Workday (Ticker: wday) - 5.33%
2. Oracle (Ticker: orcl) - 4.96%
3. Atlassian (Ticker: team) - 4.06%
4. HUBSPOT (Ticker: hubs) - 3.82%
5. SAP AE ADR 1:1 (Ticker: sap) - 3.38%
6. Microsoft (Ticker: msft) - 1.75%
7. ServiceNow (Ticker: now) - 1.18%
8. IBM (Ticker: ibm) - 1.13%
9. Adobe (Ticker: adbe) - 0.04%

Asset Spotlight: Analyst expectations drop for Salesforce

In the last 5 instances when analyst forecasts for Salesforce's Forward 12-Month FCF % declined, Toggle's analysis revealed a consistent trend of a median increase in the stock's value over the following three months.

This trend is probably because the market has already adjusted for these expectations, leading to a positive stock price movement if the company can surpasses these estimates.

Earnings Update: Snowflake reports tonight

Snowflake is anticipated to report its Q2 Fiscal 2024 earnings with expectations set at $0.10 per share and revenues of $662.22 million, compared to last year's Q2 adjusted earnings of $0.01 per share on $497.25 million in revenues.

Analysts are keenly observing Snowflake's performance amidst concerns about a slowdown in cloud spending and a previous revision of its Fiscal 2024 revenue outlook. Despite these challenges, Snowflake's strategic partnerships with major tech firms and its commitment to innovation, particularly in AI, are seen as potential drivers for its long-term progress.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.