Salesforce Stock Surges on Quarterly Beat, Raised Forecast

Year-to-date, CRM still carries a 28% deficit

Digital Content Manager
Jun 1, 2022 at 10:08 AM
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Salesforce Inc (NYSE:CRM) yesterday evening reported first-quarter earnings of 98 cents per share -- higher than Wall Street's estimates of 94 cents per share -- on a revenue beat of $7.41 billion. What's more, the company said the recent surge in inflation should not impact its margins, and raised its full-year adjusted profit forecast amid strong software demand from businesses looking to incorporate hybrid work. At last check, CRM is up 12.6% to trade at $180.46.

Despite the upbeat results, the security is attracting mixed analyst reactions. At least nine firms issued price-target cuts, with one coming from BMO to $225 from $250. Meanwhile, Barclays raised its price objective to $218 from $208. Analysts were already optimistic on CRM, with 25 of the 27 in coverage rating it a "buy" or better, while the 12-month consensus target price of $250.50 is a 37.3% premium to the security's current levels.

The shares are bouncing off a floor at the $155 level, and are looking to settle above resistance at the 30-day moving average for the first time since early April, should today's gains hold. Year-to-date, CRM is still down 28%, however.

The security is getting blasted in the options pits today, with 66,000 calls and 52,000 puts across the tape so far, which is 16 times what is typically seen at this point. Most popular is the weekly 6/3 180-strike call, followed by the 185-strike call in that same weekly series, with new positions currently being opened at both.

Options look like solid way to bet on the stock's next move, considering it now sports a Schaeffer's Volatility Scorecard (SVS) rating of 84 out of a possible 100. In other words, the equity has tended to outperform options traders' volatility expectations -- a boon for buyers. 

 

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