Salesforce (NYSE:CRM) Trading 2.2% Higher - What's Next?

Key Points

• Salesforce beat Q4 estimates, reporting $3.81 EPS vs. $3.05 expected and $11.20B revenue (up 12.1% YoY), and set FY2027 EPS guidance of 13.110–13.190 with Q1 guidance of 3.110–3.130.
• The Board approved a $25.0 billion share repurchase program (about 14.1% of shares) and raised the quarterly dividend to $0.44 ($1.76 annualized, ~0.9% yield).
• Several brokers have trimmed price targets (e.g., Wells Fargo, UBS, RBC, JPMorgan) but the consensus remains a Moderate Buy with an average target of $279.18, while the stock traded up ~2.2% to about $186 intraday.

Salesforce Inc. (NYSE:CRM - Get Free Report)'s share price traded up 2.2% during mid-day trading on Monday . The stock traded as high as $189.00 and last traded at $186.0980. 13,607,182 shares were traded during trading, an increase of 4% from the average session volume of 13,066,240 shares. The stock had previously closed at $182.14.

Wall Street Analyst Weigh In

Several brokerages have weighed in on CRM. Wells Fargo & Company decreased their price objective on shares of Salesforce from $235.00 to $210.00 and set an "equal weight" rating on the stock in a research note on Thursday, February 26th. UBS Group dropped their price objective on shares of Salesforce from $260.00 to $200.00 and set a "neutral" rating for the company in a report on Tuesday, February 17th. Northland Securities dropped their price objective on shares of Salesforce from $267.00 to $229.00 and set a "market perform" rating for the company in a report on Tuesday, March 10th. Royal Bank Of Canada dropped their price objective on shares of Salesforce from $290.00 to $210.00 and set a "sector perform" rating for the company in a report on Thursday, February 26th. Finally, JPMorgan Chase & Co. reduced their price objective on Salesforce from $365.00 to $320.00 and set an "overweight" rating on the stock in a research note on Thursday, February 26th. One investment analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating, eleven have issued a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, Salesforce currently has an average rating of "Moderate Buy" and a consensus price target of $279.18.

Salesforce Price Performance

The company has a 50 day moving average price of $187.87 and a 200 day moving average price of $223.96. The company has a market capitalization of $152.27 billion, a price-to-earnings ratio of 23.83, a PEG ratio of 1.32 and a beta of 1.29. The company has a current ratio of 0.76, a quick ratio of 0.76 and a debt-to-equity ratio of 0.18.

Salesforce (NYSE:CRM - Get Free Report) last released its earnings results on Wednesday, February 25th. The CRM provider reported $3.81 EPS for the quarter, beating the consensus estimate of $3.05 by $0.76. The company had revenue of $11.20 billion during the quarter, compared to analysts' expectations of $11.18 billion. Salesforce had a return on equity of 15.38% and a net margin of 17.96%.The business's revenue for the quarter was up 12.1% on a year-over-year basis. During the same period last year, the firm earned $2.78 EPS. Salesforce has set its FY 2027 guidance at 13.110-13.190 EPS and its Q1 2027 guidance at 3.110-3.130 EPS. As a group, equities research analysts forecast that Salesforce Inc. will post 9.71 earnings per share for the current year.

Salesforce Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, April 23rd. Stockholders of record on Thursday, April 9th will be paid a $0.44 dividend. This is an increase from Salesforce's previous quarterly dividend of $0.42. The ex-dividend date of this dividend is Thursday, April 9th. This represents a $1.76 dividend on an annualized basis and a dividend yield of 0.9%. Salesforce's dividend payout ratio (DPR) is currently 22.54%.

Salesforce announced that its Board of Directors has approved 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 purchase up to 14.1% of its shares through open market purchases. Shares repurchase plans are often an indication that the company's board of directors believes its stock is undervalued.

Insider Buying and Selling at Salesforce

In other news, Director Laura Alber purchased 2,571 shares of the firm's stock in a transaction dated Thursday, March 19th. The stock was bought at an average price of $194.58 per share, with a total value of $500,265.18. Following the acquisition, the director directly owned 9,530 shares of the company's stock, valued at approximately $1,854,347.40. This represents a 36.94% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director David Blair Kirk purchased 2,570 shares of the firm's stock in a transaction dated Wednesday, March 18th. The stock was purchased at an average cost of $194.62 per share, with a total value of $500,173.40. Following the acquisition, the director directly owned 13,689 shares in the company, valued at $2,664,153.18. This trade represents a 23.11% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 3.00% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of the company. Commonwealth Retirement Investments LLC acquired a new position in Salesforce during the fourth quarter worth $25,000. Marquette Asset Management LLC acquired a new position in Salesforce during the third quarter worth $26,000. Board of the Pension Protection Fund acquired a new position in Salesforce during the fourth quarter worth $26,000. Key Capital Management INC bought a new stake in Salesforce during the fourth quarter worth about $26,000. Finally, Gilpin Wealth Management LLC bought a new stake in Salesforce during the fourth quarter worth about $26,000. 80.43% of the stock is currently owned by institutional investors.

About Salesforce

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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