OTR Global downgraded its rating on Salesforce stock to mixed ahead of the company’s second quarter earnings release
Salesforce.com, Inc. (NASDAQ:CRM) stock plunged as much as 4% in the first few minutes of today’s trading session, after analysts at OTR Global downgraded their rating on the stock from Positive to Mixed ahead of the company’s second quarter earnings release. The provider of state-of-the-art cloud computing solutions faced increasing pressure from shareholders in the beginning of this year as share price plunged, carving its 52-week low of $52.60 in early February.
Several players in the cloud computing space such as Workday and Splunk followed a somewhat similar pattern, reflecting the ongoing turbulence across the entire sector. Analysts on the Street attributed weaker-than-expected spending and soft end-market demand for the aforementioned broader market selloff. However, investor confidence for these cloud computing names took a U-turn soon, particularly after Splunk bumped its full-year 2017 outlook. Apparently as a consequence, Salesforce.com stock surged more than 34% from its record low level.
The company is expected to post its top and bottom line results for the second quarter of fiscal year 2017 after the closing bell on August 29. For its previous quarter, Salesforce posted upbeat results; the company managed to generate $1.92 billion in total revenues, beating the $1.89 billion consensus estimate. Additionally, Salesforce’s adjusted earnings per share came in at 24 cents, surpassing the Street’s estimate by one cent. OTR Global raised caution on Salesforce stock ahead of its second quarter earnings release after conducting recent channel checks which fell below expectations.
In addition to OTR Global, analysts at Piper Jaffray also weighed in on the cloud company, reiterating their Overweight rating and $100 price target on the stock. The research firm shared similar thoughts related to Salesforce’s upcoming earnings call, citing “somewhat lighter” trends in the company’s new business. Piper Jaffray believes the company’s second quarter results would provide a buying opportunity to investors. Salesforce stock has now jumped nearly 34% over the last six months, compared to Nasdaq Composite Index which rose almost 22%.