Salesforce: Shares plummet more than 20%!

SalesForce


IMPORTANT POINTS:

  • Salesforce shares sank more than 20% on Thursday morning and are headed for their worst day since 2004.
  • This occurred because, for the first time since 2006, the company’s estimated revenues fell short of Wall Street’s expectations.
  • Some analysts began to lower their price targets for the company, triggering sharp selling of shares.

Support us with crypto to keep our newspaper alive

At the time of writing, Salesforce shares were down more than 20% to $215, heading for their worst day on the stock market since 2004.

This came after the tech giant revealed its first-quarter results, which missed revenue estimates for the first time since 2006.

In detail, its income rose 11% to $9.13 billion, when Wall Street experts estimated at least $9.17 billion.

For the second quarter, the software firm projected earnings slightly lower than experts expected: First, it expects earnings per share of $2.34 on revenue between $9.2 billion and $9.25 billion.

Analysts, however, assumed earnings per share of at least $2.40 and revenue of more than $9.37 billion.

What does Wall Street think about the future of Salesforce?

Citigroup: The firm said that the strategy that Salesforce chose in terms of marketing and execution affected the company’s performance.

For this reason, they reduced their price target for CRM from $323 to $260. In any case, they still expect profits in the coming months.

Goldman Sachs: Despite the results, analysts reiterated their buy rating for the company, although they admitted that Salesforce will need to regain investor confidence.

Morgan Stanley: The bank’s strategists also maintained its buy rating, as they believe it will benefit greatly from its AI-based business model, especially in 2025.

While the quarter was a disappointment and likely reduces investor conviction in a near-term growth rebound, evidence suggests the impacts are more cyclical than secular,” they argued.