Stock Markets Analysis & Opinion

Earnings Week Ahead: Salesforce Set for Another Beat, eBay Faces Challenging Macro

 

  • Salesforce: Analysts raised EPS estimates ahead of Q4. Fair Value models suggest the stock is still undervalued.
  • eBay: EPS estimates slightly lowered before Q4. Our Fair Value models highlight a 29% upside potential.
  • Zoom is poised for another beat. Weekday is seen as overvalued.
  • Subscribe to InvestingPro now for under $9 a month and never miss another bull market again!

Here is your Pro preview of the upcoming major earnings reports next week: Salesforce, eBay, Zoom, and Weekday.

Salesforce

Salesforce (NYSE:CRM) is set to unveil its Q4/24 earnings on Feb 28, after the market closes. During its latest quarterly announcement in Nov 2023, Salesforce provided its guidance for Q4, projecting EPS to be between $2.25 and $2.26, with revenues forecasted between $9.18 billion and $9.23 billion.

The current consensus among analysts predicts a Q4 EPS of $2.27 and revenues of $9.22B.

InvestingPro’s EPS Forecast Trend shows a significant upward revision in analysts’ EPS expectations for Salesforce, with a 44.8% increase from $1.56 to $2.27 per share over the last 12 months.

CRM

Despite a notable increase of 27% in the company’s stock price since its latest quarterly announcement, Investing Models indicate that Salesforce’s stock is still undervalued, estimating its fair value at $327.94, which suggests a 12% potential upside from the last closing price.

CRM

Recent analyses from Wall Street firms shed further light on Salesforce’s prospects:

BofA Securities observed improved deal activity, although sales cycles face challenges, including the need for additional executive approvals. The firm noted stable Sales and Service Cloud deals, balanced results across major verticals, and increased interest/pipeline in Data Cloud.

Baird upgraded Salesforce from Neutral to Outperform, citing the company’s margin delivery and the potential for growth from price increases, a rebound in front office spending, and improved sales execution.

Wedbush analyst Daniel Ives believes Salesforce is not fully recognized for its incremental AI growth potential.

Deutsche Bank maintained a Buy rating on Salesforce, with a price target of $330.00, supported by positive fourth-quarter checks and confidence in the company’s AI capabilities within CRM.

eBay

eBay (NASDAQ:EBAY) is scheduled to announce its Q4/23 earnings on February 27, after the market closes.

During its last quarterly earnings report in November 2023, eBay provided its Q4 guidance, anticipating an EPS between $1.00 and $1.05 and revenue ranging from $2.47B to $2.53B.

The current consensus among Wall Street analysts places the EPS at $1.03 and revenue expectations at $2.51B.

InvestingPro’s EPS Forecast Trend indicates a shift in analyst EPS predictions for eBay for the upcoming quarter, with a -4.8% adjustment from $1.08 to $1.03 per share over the last 12 months.

EBAY

The company has a track record of surpassing both EPS and revenue forecasts, as depicted in the Forecast vs. Actual Earnings Analysis.

EBAY

However, it’s noteworthy that the stock’s response to these earnings beats has generally been negative, largely due to the company issuing weaker-than-expected future guidance.

EBAY

Recent significant developments include eBay’s announcement in January of a workforce reduction by 1,000 jobs, about 9% of its full-time staff, as a response to the “challenging macroeconomic environment,” according to CEO Jamie Iannone. The company also plans to scale back its contracts with its “alternate workforce” in the coming months.

Our ProTips underscore eBay’s strengths, such as aggressive share buybacks, a five-year streak of dividend increases, high gross profit margins, and anticipated net income growth, among others.

EBAY

Investing models estimate eBay’s fair market at $56.73, suggesting a 29% potential upside from last Friday’s closing price, whereas Wall Street analysts predict a less than 4% increase.

EBAY

Zoom Video Communications

Zoom Video Communications (NASDAQ:ZM) is set to unveil its Q4/24 financial results on February 26, after the market closes.

During its latest quarterly report in November 2023, Zoom provided its guidance for Q4/24, expecting EPS to range between $1.13 and $1.15, with revenue forecasts between $1.125B and $1.13B. Analysts’ current expectations align closely, predicting an EPS of $1.14 and revenues of $1.13 billion.

InvestingPro’s EPS Forecast Trend shows a positive shift in analysts’ EPS estimates for Zoom, with a notable increase of 23.5% from $0.93 to $1.15 per share over the last 12 months.

ZM

The company has maintained a consistent track record of exceeding expectations for both EPS and revenue over the past four quarters.

ZM

Our ProTips highlight Zoom’s strengths, including a cash surplus over debt, expected net income growth, and substantial gross profit margins. Nonetheless, it cautions investors about the company’s high earnings multiple.

ZM

InvestingPro’s Fair Value analysis indicates Zoom’s fair value at $79.26 according to analyst targets, showcasing a 25% potential increase from its last closing price. Additionally, Investing models estimate Zoom’s fair value to be $81.61, hinting at a potential rise of over 28%.

ZM

Workday

Workday (NASDAQ:WDAY) is scheduled to announce its Q4/24 financial results on Feb 26, after the market closes.

Current Street estimates stand at $1.47 for EPS and $1.92B for revenues.

Workday has a proven track record of surpassing both EPS and revenue predictions over the past six quarters.

WDAY

Out Investing Models estimate Workday’s fair value at $277.57, suggesting a 9% downside from its current price. Analysts’ average price target of $300.22 also suggests the stock might be overvalued.

WDAY

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