Salesforce Stock Price: CRM surges in premarket after upbeat guidance

Salesforce (CRM) stock has awaken from slumber in Wednesday's premarket after posting an all-around earnings beat. The CRM share price has risen to $171.50 on an 8.3% advance. The stock of this software-as-a-service (SaaS) firm benefited from a full-year earnings guidance upgrade.

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Salesforce Earnings News: Economy looks good to CEO Benioff

CEO Marc Benioff's company reported fiscal Q1 2023 after the market closed on Tuesday. Results were better than expected with adjusted earnings per share (EPS) of $0.98 on revenue of $7.41 billion. Wall Street consensus had forecast adjusted EPS of $0.95 on $7.39 billion. This should surprise no one as Salesforce has not missed earnings consensus on either top or bottom lines even once over the last five years. This is a tech behemoth that is known for its leadership and ability to execute.

The most important focus was on Salesforce raising its full-year EPS guidance. Originally guiding for adjusted EPS of $4.62 to $4.64, the executives now see $4.74 to $4.76 as the better bet. The market shrugged off the fact that management reduced the revenue guidance slightly for the full year to between $31.7 billion and $31.88 billion. The revenue guidance was cut by about $300 million. This still would amount to a 19.6% growth rate over the previous year. Overall, Benioff and company were upbeat about the economy and the company's next few quarters, which was a stark reminder that software companies like Saleforce have much more retention and stability in turnover than most other industries.

A look at Salesforce's revenue by segment shows how diversified it is. Sales came in at $1.63 billion. Service revenue was $1.76 billion. Platform revenue was $1.42 billion, and marketing & e-commerce revenue was $1.09 billion. It would be pretty hard to sink this ship. The overall adjusted operating margin is forecast at 20% for the full year, which is better than the current rate of just under 18%.

Salesforce Stock Forecast: The winningest chart

Simply put, this chart says it is time to buy. Salesforce stock has broken out of a downtrend and is now making a concerted push higher. The goal is resistance at $186, which comes from the highs on May 2 and April 28. The 9-day moving average is now leading the 20-day moving average, and the distance between the two is sure to widen.

The Moving Average Convergence Divergence (MACD) is also showing wide breadth and moving above the zero bound. Moving above zero on the MACD usually corresponds to a major rally. If CRM stock can overtake $186, then closing the gap on April 6 between $200 and $210 will be the long-term bullish goal. Support is at $155.

CRM 4-hour chart