Why Salesforce Stock Is Moving Higher Thursday

Salesforce Inc CRM shares are trading higher Thursday after the company reported better-than-expected quarterly results and issued strong guidance. Several analysts maintained positive ratings and lifted price targets on the stock following the print.

What Happened: Salesforce said second-quarter revenue increased 11% year-over-year to $8.6 billion, which beat the consensus estimate of $8.52 billion, according to Benzinga Pro. The company reported quarterly earnings of $2.12 per share, which beat analyst estimates of 1.90 per share.

Cash flow from operations was up 142% year-over-year and free cash flow was up 379%. Operating margin came in at 17.2% for the second quarter. 

"Based on our performance and what we see in the back half of the year, we're raising our fiscal year ‘24 revenue, operating margin, and operating cash flow growth guidance," said Marc Benioff, chair and CEO of Salesforce.

"As the #1 AI CRM, with industry-leading clouds, Einstein, Data Cloud, MuleSoft, Slack and Tableau, all integrated on one trusted, unified platform, we're leading our customers into the new AI era."

Salesforce sees third-quarter revenue in a range of $8.7 billion to $8.72 billion versus estimates of $8.66 billion. The company expects third-quarter adjusted earnings of $2.05 to $2.06 per share versus estimates of $1.83 per share. 

Salesforce raised full-year revenue guidance to a range of $34.7 billion to $34.8 billion versus estimates of $34.65 billion. The company sees full-year adjusted earnings between $8.04 and $8.06 per share versus estimates of $7.45 per share. 

Analyst Updates:

• Piper Sandler analyst Brent Bracelin maintained Salesforce with an Overweight and raised the price target from $248 to $268.
• Needham analyst Scott Berg reiterated Salesforce with a Buy and maintained a $250 price target.
• Raymond James analyst Brian Peterson maintained Salesforce with a Strong Buy and raised the price target from $260 to $280.
• Oppenheimer analyst Brian Schwartz maintained Salesforce with an Outperform and raised the price target from $235 to $250.
• JMP Securities analyst Patrick Walravens reiterated Salesforce with a Market Outperform and maintained a $275 price target.
• BMO Capital analyst Keith Bachman maintained Salesforce with an Outperform and raised the price target from $255 to $262.

What Else: Thursday morning, Salesforce announced a collaboration with IBM to help businesses accelerate AI adoption. The collaboration aims to help drive efficient integration across Salesforce's AI technologies. IBM said it will use its delivery models to guide clients through adoption and deployment. 

See Also: Five Below Shares Slide As Q3 Guidance Falls Short

CRM Price Action: Salesforce shares were up 6.26% at $228.55 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Salesforce.