Latest news with #KeithWeiss
Business Insider
6 hours ago
- Business
- Business Insider
CrowdStrike Stock Tumbles: Here's What Morgan Stanley Predicts Next
CrowdStrike (NASDAQ:CRWD) stock had surged more than 40% year-to-date heading into its first fiscal quarter report, with its elevated valuation setting a high bar for performance. However, the results fell short, and shares tumbled ~6% in Wednesday's trading session. Confident Investing Starts Here: Revenue climbed 19.4% year-over-year to $1.1 billion but still fell $10 million short of Wall Street's expectations. According to management, subscription revenue took an $11 million hit, largely due to hurdles tied to Customer Commitment Packages (CCP), driven by one-off customer incentives and special partner programs. These headwinds aren't going away just yet – management expects a continued drag of $10 to $15 million per quarter over the next three periods. On a brighter note, the bottom line came through: adjusted EPS landed at $0.73, outpacing the Street's forecast by $0.07. But the outlook also failed to please. For the current quarter, CrowdStrike sees revenue landing in the range between $1.145 billion and $1.152 billion, falling short of the $1.16 billion consensus estimate. According to Morgan Stanley's Keith Weiss, the biggest sticking point wasn't the miss on revenue or guidance, but rather the net new annual recurring revenue (NNARR). Despite an 11% beat versus consensus – even better than the average ~8% beat seen over the past year – the figure didn't quite meet the buy-side's elevated hopes, especially with the stock trading at a steep 50x EV/CY27 free cash flow. However, Weiss, who ranks among the top 2% of Street stock pros, believes that despite CrowdStrike being 'undeniably an expensive stock,' there's a compelling case for renewed 30%+ free cash flow growth. The company is gaining momentum as a 'leading consolidator' in the cybersecurity space, with nearly half its customers now using six or more modules and a strong uptake of Falcon Flex contracts, which have grown sixfold year-over-year. Demand remains solid, with generative AI expanding both the threat landscape and the need for advanced security tools – areas where CrowdStrike's Charlotte AI is seeing 'strong traction.' Finally, margins are trending higher, with Q1 operating margins beating expectations and management now guiding to over 30% FCF margins by fiscal 2027. All told, Weiss sees enough upside to bump his price target from $455 to $490. Still, with shares already running hot, that implies just a modest 5% upside from current levels. Weiss' rating stays an Overweight (i.e., Buy). (To watch Weiss's track record, click here) Elsewhere on the Street, the stock garners an additional 28 Buys, 8 Holds and 1 Sell, for a Moderate Buy consensus rating. However, the $471.06 average target implies the stock is currently fully valued. (See CrowdStrike stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Yahoo
2 days ago
- Business
- Yahoo
Salesforce (CRM) Gets $404 Target as Morgan Stanley Flags 52% Upside
Morgan Stanley raised its price target for Salesforce (CRM, Financials) to $404 from $393; the revised target implies a 52.2% upside. The firm maintained its Buy rating on the stock, even after a mixed market reaction to Salesforce's fiscal Q1 results. Analyst Keith Weiss acknowledged that while earnings met estimates, investor concerns focused on weaker-than-expected margins; the pace of Agentforce growth; and the absence of an upward revision in margin guidance. Salesforce reported an operating margin of 32.3% in Q1; this came in slightly below the Street's 32.6% estimate. Weiss attributed the softness to seasonal trends, noting Q1 is typically the weakest quarter for margins. He also flagged management's decision not to raise guidancedespite currency tailwindsas a cautious move; however, he said the long-term outlook remains intact. The company is investing in growth areas such as Agentforce and Data Cloud; it is also expanding its sales team to drive revenue. Organizational efficiency efforts are underway, including staffing changes; Weiss views these steps as positive for future operating leverage. He believes Salesforce, currently trading at a mid-teens EV/FCF multiple, could be re-rated closer to the low-20x range if it maintains double-digit revenue growth and modest margin expansion; this would support continued free cash flow gains. Salesforce holds a Moderate Buy consensus from Wall Street analysts, with 31 Buys, 9 Holds, and 3 Sells in the past three months. The average analyst price target stands at $349.93; that implies a 31.86% upside from current levels. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Salesforce (CRM) Gets $404 Target as Morgan Stanley Flags 52% Upside
Morgan Stanley raised its price target for Salesforce (CRM, Financials) to $404 from $393; the revised target implies a 52.2% upside. The firm maintained its Buy rating on the stock, even after a mixed market reaction to Salesforce's fiscal Q1 results. Analyst Keith Weiss acknowledged that while earnings met estimates, investor concerns focused on weaker-than-expected margins; the pace of Agentforce growth; and the absence of an upward revision in margin guidance. Salesforce reported an operating margin of 32.3% in Q1; this came in slightly below the Street's 32.6% estimate. Weiss attributed the softness to seasonal trends, noting Q1 is typically the weakest quarter for margins. He also flagged management's decision not to raise guidancedespite currency tailwindsas a cautious move; however, he said the long-term outlook remains intact. The company is investing in growth areas such as Agentforce and Data Cloud; it is also expanding its sales team to drive revenue. Organizational efficiency efforts are underway, including staffing changes; Weiss views these steps as positive for future operating leverage. He believes Salesforce, currently trading at a mid-teens EV/FCF multiple, could be re-rated closer to the low-20x range if it maintains double-digit revenue growth and modest margin expansion; this would support continued free cash flow gains. Salesforce holds a Moderate Buy consensus from Wall Street analysts, with 31 Buys, 9 Holds, and 3 Sells in the past three months. The average analyst price target stands at $349.93; that implies a 31.86% upside from current levels. This article first appeared on GuruFocus. Sign in to access your portfolio
CNBC
6 days ago
- Business
- CNBC
Zscaler jumps 8% on strong results fueled by AI growth
Zscaler shares jumped 8% Friday after reporting stronger-than-expected results in the third fiscal quarter driven by artificial intelligence and widespread adoption of its zero-trust security platform. "The proliferation of AI in all aspects of business is increasing the need for our AI security," said CEO Jay Chaudhry in a release. "We empower customers to securely adopt both public GenAI apps and their own private AI apps, and we are increasing our investments in this area." The cloud security software company said revenues grew 23% to $678 million from about $553 million in the year-ago period. That topped the LSEG estimate of $666 million. Zscaler reported adjusted earnings of 84 cents per share, topping the adjusted EPS of 75 cents per share expected by LSEG. Billings rose 25% to about $785 million, ahead of a $760 million estimate from StreetAccount. Zscaler's earnings come as a hopeful sign for a cybersecurity industry that has shown some pockets of weakness in a volatile macroeconomic environment. SentinelOne dropped after lowering its outlook, while Palo Alto Networks shares declined after missing on gross margin. The report "echoes the strength we noted in our preview, and begins to prove out the reacceleration story that the company has been pointing to over the past few quarters," wrote Morgan Stanley's Keith Weiss. Zscaler reported a net loss of $4.1 million, or a loss of 3 cents per share, for the quarter. Last year, net income came in at $19.1 million, or 12 cents per share. The company issued upbeat adjusted EPS guidance for the fiscal fourth quarter. Zscaler expects adjusted earnings to range between 79 cents and 80 cents a share, versus the 77 cents expected by LSEG. Along with its earnings, Zscaler appointed Kevin Rubin as its chief financial officer.
Yahoo
7 days ago
- Business
- Yahoo
Morgan Stanley Maintains Overweight on Salesforce (CRM), Sees Long-Term Value in Informatica Deal
We recently published a list of . In this article, we are going to take a look at where Salesforce, Inc. (NYSE:CRM) stands against other AI stocks on latest news and ratings. On May 28, Morgan Stanley analyst Keith Weiss reiterated an 'Overweight' rating on Salesforce, Inc. (NYSE:CRM) with a $393.00 price target. Salesforce is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce. According to the firm, the company's recent acquisition of Informatica may not have been what the market expected, but its terms are seen as favorable. It announced the agreement to acquire Informatica for an estimated $8 billion in equity value. A customer service team in an office setting using the company's Customer 360 platform to communicate with customers. The firm discussed concerns about Informatica's legacy, particularly on-premise data assets, which may not match with investor expectations for Salesforce's growth vision. In other words, there are fears that Informatica might not be a good strategic fit, but the firm believes that the terms of the deal are advantageous. Moreover, Informatica's strengths in handling, organizing, and securing data may help boost Salesforce's Data Cloud and allow its AI tool, Agentforce, to work better. It also believes that the move will help Salesforce improve its operating margins, earnings per share (EPS), and FCF in FY28 (CY27) driven by substantial cost synergies. Overall, CRM ranks 3rd on our list of AI stocks on latest news and ratings. While we acknowledge the potential of CRM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRM and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
