To The Moon

$Salesforce.com(CRM)$ is scheduled to report its earnings on 29 Nov 2023 after market close. Market expect the company to top earnings expectations as it has done so for the last 4 quarters. Salesforce released its 2023 Cyber Week figures, analyzing shopping data from over 1.5 billion shoppers across its Salesforce Customer 360 platform (including 29 of the top 30 U.S. online retailers). Overall global sales were up 6% year over year (YoY), hitting $298 billion, with U.S. sales reaching $70.8 billion and increasing 5% YoY. The company is expected to post an earnings per share of $2.06 with a revenue of $8.72 billion. Salesforce last reported earnings on 30 Aug and its shares gained +3.0% the day following the earnings announcement to close at 221.46. Following its earnings release, 90 days ago, CRM stock has drifted +1.6% higher. From the time it announced earnings, Salesforce traded in a range between 193.68 and 226.83. The last price (224.92) is closer to the higher end of range. Technical is showing Salesforce will have an uptrend. Salesforce (CRM) Upcoming Earnings Guidance Salesforce has issued guidance for FY 2024. They are expecting the EPS estimate to be in the range of $8.04 to $8.06, this would mean an increase of 53% from the previous year same period. Revenue growth is expected to be in the range of $34.7 billion to $34.8 billion, this would be an increase of 11% compared to same period the previous year. Revenue growth is estimated to be around 11%. Salesforce (CRM) Past EPS and Revenue Surprise and Market Effect Salesforce have surprise both EPS and revenue in the last 2 reported quarter, but the price effect is not consistent. We can see that quarterly report on May 2023 did post a negative price effect. Whereas we saw a positive price effect of more than 3% in the last quarterly report in August 2023. We will have to watch whether Salesforce can continue to surprise on the EPS and revenue estimates. Salesforce (CRM) Historical Moves Ahead of Earnings Salesforce stock had mixed performance leading up to earnings. Shares of Salesforce traded lower, on average, in the two weeks and one day periods heading into an earnings report. The best performance was one week ahead of earnings for an average gain of 0.9% Salesforce (CRM) Historical Stock Price Reaction to Earnings Salesforce shares have moved higher in the immediate aftermath of earnings 6 out of 12 previous reports. On average the stock moved down -0.8% in the first day of trading after the company reported earnings. Salesforce (CRM) Stock Behavior After Earnings Based on the previous 12 earnings releases, CRM is more likely to trade higher 1 day after earnings for an average gain of 0.1%. Salesforce (CRM) Post Earnings Announcement Drift Salesforce share price has drifted up 1.5% post earnings announcement. Using the last 12 quarters data, the average drift between earnings announcements is 0.1%. The current drift represents a positive 0.1 standard deviation move. Current post earnings announcement drift: 1.5% Historical average post earnings announcement drift: 0.1% Historical post earnings drift standard deviation move: ±12.8% Salesforce (CRM) Post Earnings Movement The options market overestimated CRM stocks earnings move 42% of the time in the last 12 quarters. The predicted move after earnings announcement was ±7.2% on average vs an average of the actual earnings moves of 6.3% (in absolute terms). Salesforce (CRM) Earnings Implied Volatility Crush Salesforce's last earnings implied volatility (IV30) going into earnings was 35.7. The last time CRM released earnings, the implied volatility dropped to 24.1, resulting in an implied volatility crush of 33%. 5 days after earnings, the 30 day IV was 22.8. Average Implied Volatility Crush For CRM Earnings: 26% Average 30 Day Implied Volatility 1 Day Before Earnings: 45.4 Average CRM 30 Day IV for the Day of Earnings: 33.6 Average 30 Day Implied Volatility 5 Days After Earnings: 32.8 Salesforce (CRM) Implied Volatility Skew Average 25-Day Delta Put IV is increasing relative to the Call IV, this suggest that market is pricing in some downside movement. As we can see from the chart and table, the implied volatility for downside Put IV is increasing relative to upside Call IV, this suggest that market is pricing in larger fear to a downside move. Current Skew Indicator suggest a slightly bullish signal. I will monitor and see how Salesforce would be trading on 29 Nov 2023, before its quarterly earning result. Summary Based on the data I have gathered, Salesforce should be able to post a better-than-expected results and with its latest report on the 2023 Cyber Week, its sales have increased by 6%. This would mean more upside for Salesforce. I would be monitoring and see if I can do a short option trade on Salesforce. Appreciate if you could share your thoughts in the comment section whether you think Salesforce would beat estimates and post a better forecast for the rest of 2023? @TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts. Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.