Money & Markets Week Ahead for the week of August 23, 2021: I preview Salesforce earnings after the company thrived throughout the COVID-19 pandemic.
I also look into some key housing data that should tell us how hot the real estate market is right now.
Let’s see what’s in store for the week ahead on Wall Street.
Note: The IPO market is taking a bit of a breather this week. If you’d like to read up on a few IPOs to watch for later this year, click here.
Deep Dive: Salesforce Earnings
We are beyond the peak of earnings season, but some intriguing companies are still set to report quarterly numbers in the next few days.
Salesforce.com Inc. (NYSE: CRM) has smashed expectations over the last four quarters. And it will look to do so again when it reports its second-quarter numbers for its fiscal year 2022 on Wednesday.
Salesforce is both a cloud computing and “software as a service” company (SaaS). It helps businesses understand their customers in order to drive up sales and retention rates, along with other services.
The company’s business model is perfect for a pandemic, and that’s reflected in its earnings over the last year.
Salesforce Smashed EPS Expectations
In the last four quarters, Salesforce reported earnings per-share (EPS) well above expectations, including beats of 115% and 132% in the second and third quarter of 2020, respectively.
Last quarter, Salesforce reported a net income of $469 million, a whopping 373% increase year-over-year. It also reported a 48% YOY increase in cash on hand to $8.5 billion.
Saleforce’s Impressive Revenue Streak
Salesforce doesn’t miss on quarterly revenue, so it’s hard to imagine it will miss this quarter.
In the last quarter, it reported $5.96 billion in revenue, which was 1.2% higher than expected. That’s a 23% YOY increase.
The skinny: Salesforce is in a good position to beat expectations once again. EPS is expected to be $0.92 per share, according to consensus estimates — lower than last quarter’s actual but higher than last quarter’s expectations. Analysts expect revenue of $6.24 billion.
With the delta variant throwing a little more uncertainty into the mix, Salesforce is well-positioned for the rest of 2021.
Data Dump: Existing Home Sales
COVID-19 crushed the housing market in 2020, but it recovered and soared higher in the second half of the year. It almost looked like another housing bubble was forming.
We’ll know more about the state of the housing market when the National Association of Realtors releases its U.S. Existing Home Sales report on Monday.
U.S. Existing Home Sales Level Off
After hitting a peak of 6.8 million existing homes sold in November 2020, monthly numbers have slowly decreased. Last month, the National Association of Realtors reported 5.86 million units sold in June, which barely missed the 5.9 million projection.
Numbers have leveled off over the last three months. Economists set July’s forecast at 5.84 million, slightly lower than June’s total.
The skinny: The delta variant started making headlines in a big way in July, and I wouldn’t be surprised if existing home sales miss the mark for a second straight month.
The housing market was red hot earlier this year, but sentiment has cooled a bit. It seems like we’re on the way to pre-pandemic levels again.
Earnings Reports
To finish off the Money & Markets Week Ahead, here’s a look at some of the key earnings reports due out this week:
Monday
JD.com Inc. ADR (Nasdaq: JD)
Palo Alto Networks Inc. (NYSE: PANW)
Madison Square Garden Entertainment Corp. (NYSE: MSGE)
Tuesday
Medtronic PLC (NYSE: MDT)
Intuit Inc. (Nasdaq: INTU)
Best Buy Co. Inc. (NYSE: BBY)
Wednesday
Salesforce.com Inc. (NYSE: CRM)
Snowflake Inc. (NYSE: SNOW)
Williams-Sonoma Inc. (NYSE: WSM)
Dick’s Sporting Goods Inc. (NYSE: DKS)
Thursday
Toronto Dominion Bank (NYSE: TD)
Dell Technologies Inc. (NYSE: DELL)
VMware Inc. (NYSE: VMW)
Dollar General Corp. (NYSE: DG)
Peloton Interactive Inc. (Nasdaq: PTON)
Friday
NK Lukoil PAO ADR (OTC: LUKOY)
Big Lots Inc. (NYSE: BIG)
Best,
Chad Stone
Assistant Managing Editor, Money & Markets