Salesforce (NYSE:CRM) Shares Down 2.4% - What's Next?

Key Points

• Salesforce shares fell 2.4% in mid-day trading, with the stock last changing hands at $166.81 after trading as low as $163.31. Volume was above average, signaling heavier-than-normal investor activity.
• Wall Street remains broadly positive on the stock despite some mixed rating changes. Salesforce has an average analyst rating of “Moderate Buy” and a consensus price target of $259.26, though Bank of America rates it underperform with a $160 target.
• Recent fundamentals were solid: the company beat quarterly EPS and revenue estimates, with revenue up 13.3% year over year. Salesforce also announced a $25 billion share repurchase program and a quarterly dividend of $0.44 per share.

Salesforce Inc. (NYSE:CRM - Get Free Report) shares fell 2.4% during mid-day trading on Thursday . The company traded as low as $163.31 and last traded at $166.8060. 14,649,212 shares traded hands during mid-day trading, an increase of 9% from the average session volume of 13,443,295 shares. The stock had previously closed at $170.92.

Wall Street Analysts Forecast Growth

A number of brokerages have issued reports on CRM. Royal Bank Of Canada reissued a "neutral" rating on shares of Salesforce in a report on Thursday, June 4th. Stifel Nicolaus lowered their target price on shares of Salesforce from $300.00 to $250.00 and set a "buy" rating on the stock in a report on Thursday, February 26th. Bank of America initiated coverage on shares of Salesforce in a report on Monday, May 18th. They set an "underperform" rating and a $160.00 price target for the company. Daiwa Securities Group reduced their price target on shares of Salesforce from $295.00 to $280.00 and set a "buy" rating on the stock in a research report on Tuesday, June 2nd. Finally, Truist Financial set a $280.00 price objective on shares of Salesforce in a research note on Thursday, February 26th. One analyst has rated the stock with a Strong Buy rating, twenty-seven have given a Buy rating, nine have issued a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average target price of $259.26.

Salesforce Stock Performance

The stock has a 50 day moving average price of $180.90 and a two-hundred day moving average price of $207.60. The company has a debt-to-equity ratio of 1.15, a current ratio of 0.79 and a quick ratio of 0.79. The company has a market capitalization of $136.61 billion, a price-to-earnings ratio of 19.31, a price-to-earnings-growth ratio of 1.09 and a beta of 1.16.

Salesforce (NYSE:CRM - Get Free Report) last issued its quarterly earnings results on Wednesday, May 27th. The CRM provider reported $3.88 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.13 by $0.75. The business had revenue of $11.13 billion for the quarter, compared to the consensus estimate of $11.05 billion. Salesforce had a net margin of 18.73% and a return on equity of 18.72%. The firm's quarterly revenue was up 13.3% on a year-over-year basis. During the same quarter in the prior year, the company earned $2.58 EPS. Salesforce has set its FY 2027 guidance at 14.060-14.120 EPS and its Q2 2027 guidance at 3.250-3.270 EPS. On average, analysts predict that Salesforce Inc. will post 10.3 EPS for the current fiscal year.

Salesforce Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Thursday, July 2nd. Investors of record on Thursday, June 11th will be issued a $0.44 dividend. The ex-dividend date of this dividend is Thursday, June 11th. This represents a $1.76 dividend on an annualized basis and a dividend yield of 1.1%. Salesforce's dividend payout ratio (DPR) is currently 20.37%.

Salesforce announced that its Board of Directors has authorized a share repurchase plan on Monday, March 16th that authorizes the company to repurchase $25.00 billion in shares. This repurchase authorization authorizes the CRM provider to buy up to 14.1% of its shares through open market purchases. Shares repurchase plans are typically an indication that the company's board of directors believes its stock is undervalued.

Insider Activity at Salesforce

In other news, Director David Blair Kirk acquired 2,570 shares of Salesforce stock in a transaction on Wednesday, March 18th. The shares were purchased at an average price of $194.62 per share, with a total value of $500,173.40. Following the acquisition, the director owned 13,689 shares in the company, valued at $2,664,153.18. This represents a 23.11% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, Director Laura Alber acquired 2,571 shares of the firm's stock in a transaction on Thursday, March 19th. The stock was purchased at an average price of $194.58 per share, for a total transaction of $500,265.18. Following the completion of the transaction, the director directly owned 9,530 shares in the company, valued at approximately $1,854,347.40. The trade was a 36.94% increase in their position. The disclosure for this purchase is available in the SEC filing. Insiders own 3.50% of the company's stock.

Institutional Trading of Salesforce

Several institutional investors and hedge funds have recently added to or reduced their stakes in the company. Commonwealth Retirement Investments LLC bought a new stake in shares of Salesforce during the fourth quarter worth approximately $25,000. Board of the Pension Protection Fund bought a new position in Salesforce in the fourth quarter valued at approximately $26,000. Key Capital Management INC acquired a new stake in Salesforce during the 4th quarter worth $26,000. Gilpin Wealth Management LLC bought a new stake in shares of Salesforce during the 4th quarter valued at $26,000. Finally, Legacy Bridge LLC bought a new stake in shares of Salesforce during the 4th quarter valued at $27,000. 80.43% of the stock is owned by institutional investors.

Salesforce Company Profile

Salesforce, founded in 1999 and headquartered in San Francisco, is a global provider of cloud-based software focused on customer relationship management (CRM) and enterprise applications. The company popularized the software-as-a-service (SaaS) model for CRM and has built a broad portfolio of products designed to help organizations manage sales, service, marketing, commerce and analytics through a unified, cloud-first platform.

Core offerings include Sales Cloud for sales automation, Service Cloud for customer support, Marketing Cloud for digital marketing and engagement, and Commerce Cloud for e-commerce.

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