Salesforce (NYSE:CRM) Trading Down 2.4% - Here's What Happened

Key Points

• Salesforce shares fell 2.4% in mid-day trading, hitting an intraday low of $176.31 and trading below the prior close of $181.82 on lighter-than-average volume.
• Recent analyst sentiment has turned more cautious, including a downgrade to Hold by Wall Street Zen and multiple price target cuts from firms such as Northland Securities, Barclays, and Wells Fargo. Despite that, the stock still carries a consensus rating of Moderate Buy with a $279.18 price target.
• Operationally, Salesforce reported strong quarterly results with EPS of $3.81 and revenue of $11.20 billion, both ahead of estimates. The company also raised its dividend, and its board authorized a $25 billion share buyback program.

Salesforce Inc. (NYSE:CRM - Get Free Report) shares dropped 2.4% during mid-day trading on Monday . The stock traded as low as $176.31 and last traded at $177.5150. Approximately 9,289,891 shares were traded during trading, a decline of 28% from the average daily volume of 12,920,664 shares. The stock had previously closed at $181.82.

Analyst Ratings Changes

CRM has been the subject of several recent analyst reports. Wall Street Zen downgraded Salesforce from a "buy" rating to a "hold" rating in a research note on Saturday, April 18th. Northland Securities decreased their price target on Salesforce from $267.00 to $229.00 and set a "market perform" rating for the company in a research note on Tuesday, March 10th. Barclays decreased their price target on Salesforce from $265.00 to $252.00 and set an "overweight" rating for the company in a research note on Thursday, February 26th. Cantor Fitzgerald reiterated an "overweight" rating on shares of Salesforce in a research note on Thursday, February 26th. Finally, Wells Fargo & Company decreased their price target on Salesforce from $235.00 to $210.00 and set an "equal weight" rating for the company in a research note on Thursday, February 26th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-six have assigned a Buy rating, eleven have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $279.18.

Salesforce Stock Performance

The firm has a 50 day moving average of $186.78 and a two-hundred day moving average of $218.91. The stock has a market cap of $145.25 billion, a P/E ratio of 22.73, a P/E/G ratio of 1.26 and a beta of 1.14. The company has a debt-to-equity ratio of 0.18, a quick ratio of 0.76 and a current ratio of 0.76.

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

Salesforce Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Thursday, April 23rd. Shareholders of record on Thursday, April 9th were given a $0.44 dividend. The ex-dividend date was Thursday, April 9th. This represents a $1.76 dividend on an annualized basis and a dividend yield of 1.0%. This is an increase from Salesforce's previous quarterly dividend of $0.42. Salesforce's dividend payout ratio is 22.54%.

Salesforce announced that its Board of Directors has approved a share buyback program on Monday, March 16th that permits the company to repurchase $25.00 billion in shares. This repurchase authorization permits the CRM provider to buy up to 14.1% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company's management believes its shares are undervalued.

Insider Buying and Selling

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

Institutional Trading of Salesforce

Hedge funds have recently modified their holdings of the company. Vanguard Group Inc. lifted its position in shares of Salesforce by 0.3% during the 4th quarter. Vanguard Group Inc. now owns 89,843,166 shares of the CRM provider's stock worth $23,800,353,000 after buying an additional 270,913 shares during the period. State Street Corp lifted its position in shares of Salesforce by 1.3% during the 4th quarter. State Street Corp now owns 50,080,230 shares of the CRM provider's stock worth $13,286,909,000 after buying an additional 659,573 shares during the period. J. Stern & Co. LLP lifted its position in shares of Salesforce by 24,056.7% during the 4th quarter. J. Stern & Co. LLP now owns 47,385,511 shares of the CRM provider's stock worth $12,552,896,000 after buying an additional 47,189,352 shares during the period. Capital International Investors lifted its position in shares of Salesforce by 13.3% during the 4th quarter. Capital International Investors now owns 22,721,010 shares of the CRM provider's stock worth $6,019,199,000 after buying an additional 2,669,891 shares during the period. Finally, Geode Capital Management LLC lifted its position in shares of Salesforce by 3.8% during the 4th quarter. Geode Capital Management LLC now owns 21,782,556 shares of the CRM provider's stock worth $5,751,073,000 after buying an additional 791,345 shares during the period. Institutional investors own 80.43% of the company's stock.

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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