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).
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.
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
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
Wed, Feb. 10, 10:56 AM
- A day after Jefferies upgraded Salesforce (NYSE:CRM) to Hold, CLSA's Ed Maguire has upgraded to Buy. His target is $78.
- Maguire calls the 28% 2016 drop in Salesforce shares "a buying opportunity for the premier pure-play SaaS franchise with substantial scale advantages, a culture of leading-edge innovation and burgeoning [cloud app] platform business poised as the fundamental growth engine for the long term."
- He adds Salesforce's op. margin has been growing for the last three years, and that the company is charging more for its new Lightning Experience apps than prior versions. "We think this is largely justifiable given the significant product enhancements over the last year and we do not anticipate meaningful pushback."
- Maguire notes shares are trading at 25x CLSA's 2016 free cash flow/share estimate of $2.17. "For a company with sustainable growth in the high 20% range with margin expansion, we think this is a reasonable entry point." FQ4 results are due in two weeks.
Tue, Feb. 9, 11:08 AM
- With shares having fallen 20% from last Thursday's close thanks to a massive cloud software stock selloff, Jefferies' John DiFucci has upgraded Salesforce (NYSE:CRM) to Hold. His target is $54.
- DiFucci states industry talks suggest Salesforce's enterprise business has improved over the past few quarters - "We attribute this performance to exceptional sales leadership and execution, which we have always identified as the biggest risk of being short the stock." - and that a partner survey suggests mid-market momentum is strong.
- He does caution Salesforce faces tough comps for FQ4, and that subscription annual contract value growth is slowing. DiFucci also declares the cost of Salesforce's growth to be "egregious." FQ4 results arrive after the close on Feb. 24.
Mon, Feb. 8, 2:37 PM
- Many tech stocks are seeing 6%+ losses as investors flee to safety yet again. The Nasdaq is down 3.4%, and the S&P 2.7%.
- As was the case on Friday following Tableau and LinkedIn's disappointing guidance, a slew of enterprise tech stocks are seeing big losses, with cloud software and security tech names well-represented on the casualty list.
- Also: Solar stocks are having another brutal day (TAN -6.7%) as energy stocks get routed amid fears Chesapeake Energy is close to bankruptcy. WTI crude oil is once more near $30/barrel.
- Enterprise software decliners: Adobe (ADBE -9.6%), Paylocity (PCTY -19.1%), Salesforce (CRM -9.9%), Workday (WDAY -12%), Guidewire (GWRE -12.5%), ServiceNow (NOW -11.5%), Zendesk (ZEN -13.8%), Paycom (PAYC -13.4%), Marin Software (MRIN -10.3%), Castlight (CSLT -8.4%), Cornerstone OnDemand (CSOD -12.1%), Atlassian (TEAM -13.2%), inContact (SAAS -9.6%), and Bazaarvoice (BV -14.5%).
- Enterprise security decliners: Palo Alto Networks (PANW -12.2%), FireEye (FEYE -9.8%), CyberArk (CYBR -11.5%), Proofpoint (PFPT -12.7%), Qualys (QLYS -8.9%), Imperva (IMPV -9.7%), Rapid7 (RPD -9.4%), and Barracuda (CUDA -8.4%).
- Solar decliners: SunEdison (SUNE -11.3%), SunPower (SPWR -8.8%), JinkoSolar (JKS -7.6%), SolarEdge (SEDG -7.9%), Yingli (YGE -7.1%), TerraForm Power (TERP -10.7%), and TerraForm Global (GLBL -9.2%).
- Other major decliners: Micron (MU -9.1%), Western Digital (WDC -10.5%), Arista (ANET -10.9%), Universal Display (OLED -10.6%), Rackspace (RAX -11.3%), Fitbit (FIT -8.7%), Nimble Storage (NMBL -11.3%), Sierra Wireless (SWIR -9.9%), Rocket Fuel (FUEL -9.8%), Knowles (KN -9%), Mitel (MITL -8.9%), and Alarm.com (ALRM -8.9%).
- Previously covered: Yelp, Cognizant, Tableau, Globant, Ambarella, European tech stocks
Fri, Feb. 5, 11:01 AM
- A long list of enterprise software and security tech names are off sharply after business intelligence/analytics software upstart Tableau (down 45.3%) reported slower-than-expected license revenue growth and issued below-consensus Q1/2016 guidance.
- Also possibly weighing: LinkedIn (down 39.6%), which derives a large % of its revenue from cloud-based recruiting and sales tools for enterprises, issued weak Q1/2016 guidance.
- Given the magnitude of the drops, margin calls and forced selling by funds could be playing a big role. The Nasdaq is down 2.2%.
- Tableau suggested its growth slowdown has to do with softening IT spend and a need to improve sales productivity, but analysts have raised questions about competition from the likes of Microsoft, Amazon, and Qlik. LinkedIn forecast a growth slowdown for its field sales hiring solutions business, while blaming European/Asian macro pressures. The company also noted its display ad business continues declining amid weak industry growth.
- Major enterprise software decliners include Splunk (SPLK -23.7%), Workday (WDAY -15.1%), Adobe (ADBE -7%), Zendesk (ZEN -15.2%), ServiceNow (NOW -13.6%), NetSuite (N -12.4%), Salesforce (CRM -11.2%), Paycom (PAYC -10.6%), Ellie Mae (ELLI -11.5%), Cornerstone OnDemand (CSOD -7.8%), Veeva (VEEV -7.7%), Ultimate Software (ULTI -9%), Luxoft (LXFT -7.5%), Manhattan Associates (MANH -8.5%), Box (BOX -6.6%), Guidewire (GWRE -13.6%), Demandware (DWRE -9.3%), Hortonworks (HDP -9.7%), and Tableau rival Qlik (QLIK -16.6%). The casualty list includes many cloud software firms, as well as several analytics software plays. Previously covered: New Relic, Atlassian.
- Major decliners among security tech firms: Palo Alto Networks (PANW -12%), FireEye (FEYE -8.9%), Rapid7 (RPD -8.6%), CyberArk (CYBR -8.3%), Proofpoint (PFPT -8%), Imperva (IMPV -8.3%), Fortinet (FTNT -6.9%), and Vasco (VDSI -5.1%). The selloff comes in spite of an FQ3 beat and in-line FQ4 guidance from Symantec, which has been losing share to various upstarts.
Fri, Feb. 5, 9:17 AM
Thu, Jan. 28, 2:53 PM
- Though the Nasdaq is up 0.8%, enterprise cloud software firms Salesforce (CRM -2.7%), Workday (WDAY -3.8%), Demandware (DWRE -4.5%), Veeva (VEEV -3.5%), Cornerstone OnDemand (CSOD -3.3%), Marketo (MKTO -4.4%), Actua (ACTA -2.4%), HubSpot (HUBS -6.2%), and Zendesk (ZEN -2.7%) are lower after cloud IT service management (ITSM) software leader ServiceNow (NOW -16.5%) posted a Q4 billings miss to go with revenue/EPS beats and issued light 2016 sales guidance.
- On ServiceNow's earnings call (transcript), CFO Michael Scarpelli attributed the billings shortfall to a ~$5M forecasting error. Regardless, Mizuho and MKM have responded to the Q4 report by downgrading to Neutral. Mizuho: "We find two [billings] misses in one year concerning." The firm is also worried about a premium valuation, missed quotas by sales reps, and a "large customer's preference to cut payment terms in half."
- MKM is less concerned about the billings miss, and calls Q4 results solid. But the firm is worried about macro pressures, and thinks ServiceNow's track record of major op. margin guidance beats is "unlikely to be sustained given decelerating billings and the current macroeconomic environment."
Nov. 18, 2015, 5:44 PM
salesforce.com, inc. provides enterprise cloud computing applications. It provides a comprehensive customer and collaboration relationship management service to businesses of all sizes and industries and also provides a technology platform for customers and developers to build and run... More
Industry: Application Software
Country: United States
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