Zinger Key Points
- Stephanie Link said the stock isn't too expensive, but she's concerned about the comparisons.
- Jim Lebenthal noted that it's a high-multiple stock, and good earnings are not likely to be rewarded.
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Salesforce Inc CRM is set to report its first-quarter financial results after the bell on Tuesday. Some investors will be watching closely amid the unfavorable market environment for software stocks, while others are already looking past the quarter.
What To Know: The CNBC "Fast Money Halftime Report" panel weighed in on Salesforce stock ahead of the company's report on Tuesday.
Virtus Investment Partners' Joe Terranova noted that he doesn't own the stock, but he's interested in buying shares if the company provides a strong outlook.
"I think you've got to have the type of guidance that would get an investor who is not yet invested in the company interested in buying it, and that's exactly how I would categorize myself," Terranova said.
He told CNBC that he will be paying attention to the tone the company sets for the coming quarters and beyond. Terranova plans to initiate a position if the company can show confidence in what's ahead.
Hightower Advisors' Stephanie Link acknowledged that the stock isn't too expensive trading around 30 times forward earnings, however, she's concerned about the comparisons.
"They had the best quarter ever in the company's history last quarter, and I think that's going to be tough to repeat," Link said.
See Also: Here's How Needham Views Salesforce, UiPath, Phreesia, Veeva Ahead Of Quarterly Results
Cerity Partners' Jim Lebenthal is taking a different approach.
"I like this company. I like it a lot. It's small in my portfolio, and the reason it's small is because of the multiple," Lebenthal said. "A high-multiple stock like this is not likely to be rewarded no matter how good their earnings are."
However, he isn't concerned. The earnings reaction will be based on a short-term assessment, and Lebenthal is more focused on the long-term prospects of Salesforce.
"For the next few years, I see what this company is doing. We use it at our firm. It's fabulous, so I'm just not going to get caught up with today's report and how it reacts. This is a long-term hold," Lebenthal said.
CRM Price Action: Salesforce has traded between $154.55 and $311.75 over a 52-week period.
The stock was down 1.07% at $163.37 at press time.
Photo: courtesy of Salesforce.
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