Salesforce (NYSE:CRM) Shares Gap Down - Here's What Happened

Key Points

• Salesforce shares gapped down ahead of trading, opening well below the prior close as investors reacted to a mix of analyst downgrades and concerns that the stock’s AI-driven optimism may have run ahead of results.
• Despite the pullback, several analysts remain constructive: Guggenheim upgraded the stock to Buy, and the broader Wall Street view is still Moderate Buy with a consensus target price of $254.42.
• Salesforce continues to post solid operating results and shareholder returns, including a recent earnings beat, a quarterly dividend, and a $25 billion stock repurchase authorization, while also investing heavily in AI and enterprise expansion efforts.

Salesforce Inc. (NYSE:CRM - Get Free Report)'s share price gapped down prior to trading on Thursday . The stock had previously closed at $166.58, but opened at $158.33. Salesforce shares last traded at $162.0170, with a volume of 2,472,463 shares.

Salesforce News Summary

Here are the key news stories impacting Salesforce this week:

• Positive Sentiment: Salesforce is still getting support from bullish analysts who argue the selloff has gone too far, with Guggenheim recently upgrading the stock to Buy and calling the AI bear case overdone.
• Positive Sentiment: The company continues to expand its AI and data initiatives, including new Slackbot capabilities and broader Agentforce-related offerings, which could improve long-term revenue opportunities.
• Positive Sentiment: Salesforce also announced a major U.S. Air Force fleet-management deal through Missionforce, showing that its software is gaining traction in large enterprise and government use cases.
• Neutral Sentiment: Some commentary says Salesforce may be “too cheap to ignore” after the stock’s sharp pullback, suggesting valuation is becoming more attractive to some investors.
• Neutral Sentiment: The company is spending heavily on AI, including a planned $1 billion investment in Switzerland, but investors remain uncertain about how quickly that spending will translate into faster growth.
• Negative Sentiment: KeyBanc’s downgrade and reduced confidence in Agentforce’s near-term impact are pressuring sentiment, reinforcing concerns that Salesforce’s AI strategy is taking longer to pay off than bulls expected.

Wall Street Analyst Weigh In

Several research analysts have issued reports on the company. Scotiabank lowered Salesforce from a "sector outperform" rating to a "sector perform" rating in a research report on Thursday, June 18th. DA Davidson dropped their target price on shares of Salesforce from $200.00 to $175.00 and set a "neutral" rating on the stock in a report on Thursday, May 28th. Wedbush began coverage on Salesforce in a report on Wednesday, July 1st. They issued an "outperform" rating on the stock. HC Wainwright downgraded shares of Salesforce to a "negative" rating in a research report on Thursday, June 18th. Finally, TD Cowen reaffirmed a "buy" rating on shares of Salesforce in a research report on Friday, June 12th. One investment analyst has rated the stock with a Strong Buy rating, twenty-seven have assigned a Buy rating, fourteen have assigned a Hold rating and three have given a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $254.42.

Salesforce Stock Down 2.1%

The company has a current ratio of 0.79, a quick ratio of 0.79 and a debt-to-equity ratio of 1.15. The business has a fifty day moving average of $172.63 and a two-hundred day moving average of $195.42. The company has a market cap of $133.62 billion, a price-to-earnings ratio of 18.87, a PEG ratio of 1.06 and a beta of 1.18.

Salesforce (NYSE:CRM - Get Free Report) last released its earnings results on Wednesday, May 27th. The CRM provider reported $3.88 EPS for the quarter, topping analysts' consensus estimates of $3.13 by $0.75. Salesforce had a net margin of 18.73% and a return on equity of 18.72%. The business had revenue of $11.13 billion during the quarter, compared to analysts' expectations of $11.05 billion. During the same quarter in the previous year, the company earned $2.58 earnings per share. The company's quarterly revenue was up 13.3% on a year-over-year basis. Salesforce has set its FY 2027 guidance at 14.060-14.120 EPS and its Q2 2027 guidance at 3.250-3.270 EPS. As a group, equities analysts anticipate that Salesforce Inc. will post 10.29 EPS for the current fiscal year.

Salesforce Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Thursday, July 2nd. Stockholders of record on Thursday, June 11th were paid a $0.44 dividend. This represents a $1.76 annualized dividend and a dividend yield of 1.1%. The ex-dividend date of this dividend was Thursday, June 11th. Salesforce's dividend payout ratio is 20.37%.

Salesforce announced that its Board of Directors has initiated a stock repurchase plan on Monday, March 16th that authorizes the company to repurchase $25.00 billion in outstanding shares. This repurchase authorization authorizes the CRM provider to purchase up to 14.1% of its stock through open market purchases. Stock repurchase plans are often an indication that the company's management believes its shares are undervalued.

Institutional Inflows and Outflows

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