Why Shares of Salesforce Soared This Week
Shares of Salesforce (NYSE: CRM) rose by as much as 17% this week, according to data from S&P Global Market Intelligence. The enterprise software giant posted strong earnings and revenue for its fiscal 2023 fourth quarter, which won praise from Wall Street analysts and the company's activist investors. Shares are now up almost 40% year to date, but are still down by 10% over the past 12 months.
In the fiscal fourth quarter, which ended Jan. 31, Salesforce's revenue grew by 17% year over year on a constant-currency basis to $8.38 billion. This significantly beat Wall Street's consensus expectation of $7.99 billion. Earnings were also strong, at $1.68 per share, 23% above analysts' consensus estimate. These results were the chief reason why Salesforce's stock popped this week, as investors became more optimistic about the company's prospects this year.
Salesforce also put out guidance for 10% revenue growth and GAAP operating margins of 11% in its fiscal 2024. This was ahead of the company's previous margin guidance, which was applauded by the group of activist investors who have been circling the stock. These five large investors -- led by Elliott Management -- said the accelerated margin expansion was "consistent" with their recommendations, indicating that, for the time being, they wouldn't try to get more aggressive and shake things up at the software giant.
Source Fool.com
