CRM, HPE, LULU, CRWD: Earnings Preview

By Duncan Ferris

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Company earnings in focus this week include Salesforce (NYSE: CRM), Hewlett Packard (NYSE: HPE), Lululemon Athletica (NASDAQ: LULU) and CrowdStrike Holdings (NASDAQ: CRWD).

Earnings Preview

A rough earnings season continued last week as more companies felt the wrath of disappointed investors, though there were success stories too.

There were further woes for tech stocks as Nvidia struggled following a lukewarm update, while social media outfit Snap was also down in the dumps. Retail was in focus too but was more of a mixed bag than expected, with fashion retailer Gap disappointing but the likes of Costco and Macy’s performing well.

However, stocks ended the week on a high as inflation data indicated that the rapid growth seen over the last few months could be abating.

Here are the key earnings updates we have picked out for this week:

Salesforce (NYSE: CRM)

San Francisco-based cloud software specialists Salesforce is set to release its next earnings update on Tuesday evening. The business racked up record results in the fourth quarter of its 2022 financial year, achieving revenues of $7.33bn. This pushed the company’s full year revenue up to $26.49bn, an increase of 25% against the year before.

With the first three-month period of the company’s new financial year, investors are hoping that Salesforce’s results will indicate the health of cloud software providers. The company began the period with optimism, having raised its FY2023 revenue guidance to $32.1bn and forecasted Q1 revenue at $7.37bn.

The company’s acquisitions of outfits like Slack, Mobify and Vlocity have added variety and appeal to the business’ offering, but it could suffer as businesses look to cut costs amid high inflation. Look out for revenue growth and subscription stability.

Hewlett Packard (NYSE: HPE)

Multinational technology giant Hewlett Packard has not dropped as sharply as some of its peers since the start of the year, dropping by just over 2%.

Over the weekend the business announced it had managed the build the world’s first supercomputer to break the exascale speed barrier, making it the planet’s fastest supercomputer. The machine, which was built for the US Department of Energy’s Oak Ridge National Laboratory, sits as proof that the business remains at the cutting edge of its field.

The company’s last earnings release saw it deliver an improved gross margin despite supply chain difficulties, as well as modest increases to revenue and order growth. This caused the company to hike its outlook. Investors should look out for further cost-cutting improvements and steady revenue growth.

Hewlett Packard’s earnings update is set for release after the closing bell on Wednesday.

Lululemon Athletica (NASDAQ: LULU)

It has been an up and down earnings season for retailers, with the likes of Macy’s and Dollar Tree reporting reassuringly sound earnings last week after much poorer data from retail giants Target and Walmart sent investors into a panic earlier in May.

This fitness wear retailer is throwing its hat in the ring with its earnings update this week, having soundly beaten expectations with its previous update and enjoyed a double-digit share price boost. The company is clearly riding high, having released a five-year growth plan to double its revenue by 2026 back in April.

Even so, the company’s share price is down by almost 25% across the year to date amid concerns that, as a high growth stock it will struggle in a high inflation environment. However, the company still has its backers and could be a chance to pick up an exciting stock at a cut price.

Investors should look out for how the company’s new running shoe has performed since its launch in March, as well as how the company’s home fitness range has fared.

Investors can expect Lululemon earnings on Thursday evening.

CrowdStrike Holdings (NASDAQ: CRWD)

Crowdstrike has forecasted that its first quarter earnings will stand between $458.9m and $465.4m as the conflict in Ukraine and other global instability could continue to boost demand for cybersecurity.

Additionally, the business does not seem intimidated by inflationary pressures. Speaking during the company’s Q1 earnings call, cofounder and CEO Matthew Prince said:

“I think that there is definitely we're all seeing the inflationary environment and the concerns around that. What I like, though, is I can't imagine a company that is better positioned for a situation like that than we are. We're offering a service which is not a nice to have, but a must-have. We're offering a service in a way which saves customers money over what their existing solutions are.”

The company’s share price has fallen by more than 15% across the year to date, but a strong showing here could indicate that the business is ready to bounce back. Additionally, its share price jumped on Friday after fellow cybersecurity firm Zscaler recorded better than expected earnings and data indicated that inflation acceleration may have passed its peak.

Look out for the cybersecurity outfit’s earnings release after the close of trading on Thursday evening.

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IMPORTANT NOTICE AND DISCLAIMER

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Duncan Ferris does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Duncan Ferris has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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