Fri, Jun. 24, 10:34 AM
- After a historic Brexit vote, Brean Capital is looking at software stocks in terms of their exposure to the continent and Britain.
- The vote means near-term volatility for currency rates, Yun Kim notes, that could have an outsize impact on companies with stronger exposure outside America.
- Meanwhile, companies like Intuit (INTU -2.8%) have a stronger U.S. element in their revenue mix. “We note that INTU has the least amount of exposure outside of the U.S. (less than 5% of revenue), with MANH [Manhattan Associates, -3.6%] and CRM [Salesforce.com, -2.9%] having less than 10% exposure in the U.K. based on our estimates,” Yun Kim writes.
- Meanwhile, companies like MicroStrategy (MSTR -3.2%) have 15% exposure to the UK and 30% to Europe; Qlik Technologies (QLIK -1.1%) has 10% exposure to the UK and 49% to Europe, and Varonis Systems (VRNS -5.1%) has 18% exposure to the UK and 35% to Europe.
- Holding Buy ratings from Brean: Salesforce.com (price target of $110, implying 38% upside); Intuit (price target of $130, implying 22.7% upside); Manhattan Associates (price target of $75, implying 17.7% upside); and Varonis (price target of $35, implying 43.6% upside).
Thu, Jun. 16, 6:03 PM
- Salesforce (NYSE:CRM) was bidding for LinkedIn (NYSE:LNKD) before the professional social network agreed to a $26.2B deal with Microsoft (NASDAQ:MSFT), sources tell Bloomberg.
- There was already speculation Salesforce (currently has a $55.3B market cap) or another third party was vying to acquire LinkedIn, given Microsoft is paying a near-50% premium to where LinkedIn traded before the deal was announced. LinkedIn's recruiting/jobs products would've complemented Salesforce's cloud CRM apps, and its user data could've been integrated with the apps. LinkedIn's Sales Navigator social selling tool already syncs with Salesforce's apps.
- Last year, Salesforce was reported to have held buyout talks with Microsoft that fell apart due to disagreements over price.
Wed, Jun. 1, 7:45 AM
- Demandware (NYSE:DWRE) +55.9% premarket after Salesforce.com (NYSE:CRM) agrees to acquire the provider of software to design e-commerce websites, in a deal worth ~$2.8B; CRM -2% premarket.
- CRM's cash offer of $75/share represents a 56.3% premium to DWRE's closing price yesterday.
- CRM expects the deal to raise its FY 2017 revenue by $100M-$120M while reducing adjusted EPS by $0.07; CRM also expects FQ2 adjusted EPS of $0.21-$0.22 and revenue of $2.01B-$2.03B.
- DWRE's clients include Lands' End, L'Oreal and Marks and Spencer Group.
Wed, May 25, 4:48 PM
- Amazon Web Services (NASDAQ:AMZN) says it's been chosen by Salesforce.com (NYSE:CRM) as its preferred public cloud infrastructure provider.
- That means as part of an infrastructure expansion, Salesforce will increase usage from existing services on AWS (Heroku, Marketing Cloud Social Studio, SalesforceIQ, and Salesforce IoT Cloud) to add core services: Sales Cloud, Service Cloud, App Cloud, Commnity Cloud, Analytics Cloud and more.
- AWS was a standout in Amazon's Q1 results, with revenues that grew 64% Y/Y and profits that tripled, helping the parent company to beat expectations.
- Updated: The companies confirm that the "third-party provider" deep in Salesforce's 10-Q that's set to receive $400M in infrastructure spending over the next four years is AWS.
Thu, May 19, 9:18 AM
Wed, May 18, 4:16 PM
- Salesforce.com (CRM +1.4%) has jumped after hours, up 5.3%, as it beat expectations on top and bottom lines in its Q1 earnings report that featured an upbeat look ahead at revenues.
- Profits grew 50% on a non-GAAP basis. Deferred revenue of $4.01B was up 31% Y/Y; unbilled deferred revenue came to $7.6B, up 27%.
- Revenue breakout by cloud service offering: Sales Cloud, $724.6M (up 14.9%); Service Cloud, $540.1M (up 32.5%); App Cloud and other, $325.9M (up 45.5%); Marketing Cloud, $184.9M (up 29.1%).
- The company's guided to Q2 revenues of $2.005B-$2.015B -- a 23% Y/Y gain and beating consensus for $1.982B. Non-GAAP diluted EPS is forecast at $0.24-$0.25 vs. an expected $0.25.
- For the full year, it expects revenues of $8.16B-$8.2B (vs. consensus for $8.12B) and non-GAAP EPS of $1.00-$1.02, in line.
- Conference call to come at 5 p.m. ET.
- Press Release
Wed, May 18, 4:07 PM
Tue, May 17, 5:35 PM
Mon, Apr. 18, 12:26 PM
- Brean recently published its most compelling investment ideas for Q2. Among them:
- ETSY - target price $20. Implied upside 126%. "We believe Etsy’s seller services efforts (advertising, payments, and shipping) provide multiple means for the company to materially increase the value of its platform of 24.0M buyers and 1.6M sellers of handmade and vintage merchandise."
- HRTX - target price $55. Implied upside 167%. "The FDA should finally get its act together and approve the Sustol NDA in early April. We view the almost 3-month delay as a nonissue because we do not believe that anything inherent about Sustol is causing the delay."
- SCYX - target price $16. Implied upside 276%. "SCY-078, SCYNEXIS’ lead product candidate, has the potential to become the first glucan synthase inhibitor available both orally and intravenously... Based on the size of the market, competition from other drug candidates in development is limited, and we expect SCY-078 to compete well in the market if approved."
- ARAY - target price $12. Implied upside 99%. "We believe the company is finally positioned to reliably grow at 2-3 times the market (which is currently posting 2-3% growth), and thus we are willing to stick our necks out and once again make this a top pick. We also see leverage in the P&L, anticipating further gross margin gains, but mostly from operating expenses, which are expected to grow at only half the rate of the top line."
- STX - target price $65. Implied upsdoide 152%. "We believe gross margin will continue to recover as product cycle drive, along with cost savings, will lead to margin expansion back to ~28%, from 24.2% and 25.6% in the Sep Q and the Dec Q, respectively. STX dividend yield of 7%+ displays confidence in the business model and its ability to remain extremely cash-flow generative."
- WDC - target price $120. Implied upside 191%. "We believe WDC / SNDK can generate FY17 EPS of $8.00+ and the stock “normalized” should garner at least a 12x multiple, with potential for 15x, expanding from current PE of <6x."
- CRM - target price $100. Implied upside 30%. "In our view, salesforce.com has now replaced SAP and ORCL as the de facto standard in enterprise business applications, which positions the company for the next stage of growth... Our checks indicate large global system integrators are actively pitching salesforce.com solutions over SAP and ORCL, reflecting salesforce.com’s de facto standard status in the enterprise application market."
- Now read How I Stopped Being A Jerk With My Money »
Tue, Apr. 12, 7:12 PM
- With shareholders upset and suing over "excessive compensation," Salesforce.com (NYSE:CRM) froze the pay of CEO Marc Benioff for the coming year, and reported his total pay fell in the past year.
- Benioff earned $33.4M for the year ended Jan. 31, down from a previous $39.9M. Stock awards made up $17.5M of that fiscal 2016 total, while option awards came to $9.8M (down from $34.4M).
- For fiscal 2017, the compensation committee decided to lock in Benioff's salary at $1.55M and cash bonus at $3.1M.
- CRM is up 9.8% over the past 12 months, but is up 41% from its 52-week low of $52.60, set on Feb. 8.
- Salesforce proxy statement
- Now read Creative Accounting, Slowing Growth And Insider Selling Combine To Set Up For Huge Disappointment »
Mon, Feb. 29, 5:04 PM
- Salesforce (NYSE:CRM) has made its Health Cloud patient management software solution generally available. The company is charging healthcare providers $150/user/month. (Press Release)
- Salesforce declares Health Cloud provides an integrated view of a firm's patient info, while also integrating with electronic health record (EHR) platforms to to make patient data quickly available across PCs and mobile devices. Effective task-management, collaboration, and patient messaging tools are also promised.
- CRN: "Health Cloud acts as an 'engagement layer' on top of records systems and medical devices widely used to deliver care, coordinate treatment, conduct at-home monitoring, and handle billing, reimbursements and payment processing. It's not much different from what Salesforce has been doing for more than a decade with business systems like ERP, inventory and business management."
- The launch comes nearly two years after Salesforce created an Industries Business Unit to create products aimed at six verticals, with healthcare/life sciences as one of them. While expanding Salesforce's addressable market, the effort could lead to some friction with partners who have built industry-specific apps that integrate with Salesforce's core CRM apps and/or are built on top of the company's cloud app platforms.
- Back in 2014, Salesforce said it aims to produce $1B/year in total revenue from healthcare clients.
Thu, Feb. 25, 9:12 AM| Thu, Feb. 25, 9:12 AM | 9 Comments
Wed, Feb. 24, 5:39 PM
Wed, Feb. 24, 4:24 PM
- Though FQ4 EPS was only in-line (revenue slightly beat), Salesforce (NYSE:CRM) is guiding for FQ1 revenue of $1.885B-$1.895B (+25% Y/Y) and EPS of $0.23-$0.24, above a consensus of $1.86B and $0.21. On-balance-sheet deferred revenue is expected to be up 24%-25% Y/Y.
- FY17 (ends Jan. '17) guidance is for revenue of $8.08B-$8.12B (+21%-22% Y/Y) and EPS of $0.99-$1.01 vs. a consensus of $8.08B and $0.99. Op. cash flow is expected to be up 23%-24% Y/Y.
- Deferred revenue/cash flow: On-balance-sheet deferred revenue rose 29% Y/Y in FQ4 to $4.29B, a slight improvement from FQ3's 28% growth. Unbilled deferred revenue rose 25% to $7.1B, after growing 24% in FQ3. Deferred revenue growth drove free cash flow of $390.9M (+58% Y/Y). For the whole of FY16, free cash flow rose 50% to $1.33B, easily topping GAAP net income of -$47.4M and non-GAAP net income of $506.8M.
- Top-line performance: Sales Cloud revenue +12% Y/Y to $708.9M. Service Cloud (customer support software) +35% to $495.3M. Marketing Cloud (cloud marketing automation software) +31% to $184M. App Cloud/Other (Heroku/Force.com) +42% to $294.5M.
- Financials: Non-GAAP operating expenses rose 23% Y/Y to $1.19B. On a GAAP basis, cost of revenue totaled $443.7M, sales/marketing spend $890.4M, R&D $250.1M, and G&A $203.9M. Stock compensation spend equaled 9% of revenue. Salesforce ended FQ4 with $2.7B in cash, $1.1B in convertible debt, and a $199M loan tied to its HQ purchase.
- CRM +7.2% after hours to $66.99. Jefferies and CLSA's upgrades appear well-timed.
- Salesforce's FQ4 results, earnings release
- Update (7:29PM ET): The post has been updated to include additional details about Salesforce's results. Shares are now up 9.4% after hours.
Wed, Feb. 24, 4:07 PM
Tue, Feb. 23, 5:35 PM
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Industry: Application Software
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