The Party's Just Getting Started For Salesforce

According to analysts at Stifel, salesforce.com, inc. (NYSE: CRM)'s 31-percent gain since the start of 2017 is just the beginning.

Stifel's Tom Roderick maintains a Buy rating and $100 price target on salesforce's stock, noting that the current environment is "rewarding consistency and fundamental execution." In addition, the company's reputation is also supporting the stock when faced with less-than-stellar metrics.

For example, salesforce reported on February 28 that its bookings grew 33 percent year-over-year in the fourth quarter; the stock briefly dipped. But investors "quickly looked straight through the good news" for the quarter and "fixated" on the first quarter 2018 implied bookings guidance of 4–7-percent year-over-year growth. But at the end of the trading session, the stock finished higher, implying "investors have perhaps forgotten what the temporary concern was at that moment."

Q1 Expectations

Salesforce's fiscal first-quarter 2018 report is scheduled to be released after Wednesday's market close. The analyst is modeling the company to report a 23-percent year-over-year revenue growth to $2.35 billion (versus the consensus estimate of $2.352 billion), of which subscription and support revenue will account for $2.17 billion, and professional services and other revenue of $180 million.

The analyst is also modeling salesforce's earnings per share to be $0.26, which equals the company's own guidance and the Street's estimate.

Finally, the analyst stated that his industry checks and conversations point to continued strength in financial services, and salesforce is seeing success in piggybacking on its Veeva partnership to sell Service Cloud and Marketing Cloud deals.

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