Wednesday's Headlines: Salesforce Shares Slump Post-Earnings

Wednesday's Headlines: Salesforce Shares Slump Post-Earnings

Here were the biggest movers in the MyWallSt shortlist yesterday:

Moving Up ⬆️

Chegg (CHGG) +8.4%

Zendesk (ZEN) +7.4%

Apple (AAPL) +3.2%

Boston Beer Co. (SAM) +2.0%

ShotSpotter (SSTI) +1.9%

Moving Down ⬇️

Baozun (BZUN) -7.1%

Intuit (INTU) -6.1%

Howard Hughes Corporation (HHC) -6.0%

Nordstrom (JWN) -6.0% (BILL) -5.9%

1. Like so many others right now, Salesforce’s (CRM) share price is getting a post-earnings bludgeoning, falling more than 6% after hours. Despite sales rising 27% year-over-year (YoY) to $6.86 billion and earnings per share of $1.27 — far surpassing estimates — Q4 guidance wasn’t what analysts wanted. The company expects revenue of between $7.22 billion and $7.23 billion in the current quarter, which is — hold the gasp — only in line with expectations. In the experts’ defense, Salesforce is expecting EPS to fall between $0.72 and $0.73, well short of estimates. CEO and Founder Marc Benioff wasn’t concerned though, stating that “No other software company of our size or scale is really performing at this level.” Read the official release here.

2. Chegg (CHGG) is expanding its international footprint in the education technology industry. It is acquiring EU learning platform Busuu in an all-cash deal valued at $436 million that brings with it 500,000 paying subscribers from the Busuu language learning app.  Although acquisitions can be tricky, the two platforms align well to expand product offerings in the EdTech space and Chegg CEO Dan Rosenweig said the team at Bussu is “a great cultural fit”. Not only does this deal open Chegg up to new markets, but it is gaining access to a library of cross-functional content that can be recalibrated for the U.S. market. The company has also got approval for a $300 million accelerated share repurchase program, suggesting Chegg believes its shares are undervalued right now. Read more here.

3. Meta Platforms (FB) has been instructed to sell ownership in Giphy, the GIF-sharing platform. One of the reasons behind ordering the sale include competitiveness in the U.K. ad market — Giphy previously operated and competed with Meta in display ads, but following its $400 million acquisition in 2020, Meta ceased Giphy’s ad operations. Secondly, regulators took issue with traffic from Giphy to Meta-owned apps Facebook, WhatsApp, and Instagram, which already amount to 73% of U.K. user interaction time on social media. Unsurprisingly, Meta isn’t all too happy with the decision and a spokesperson has said it will be “consider all options, including appeal”. Read the full story here.

Two companies on the MyWallSt shortlist that will report earnings today:

nCino (NCNO)
Veeva Systems (VEEV)

Get this week’s full earnings calendar here. 

David GranahanDavid Granahan

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