Salesforce (NYSE:CRM) Trading Down 4.2% - Should You Sell?

Key Points

• Salesforce shares fell 4.2% in Wednesday trading, dropping to as low as $154.23 after closing at $161.71 the prior session, with volume running well above average.
• The company is drawing mixed reactions over its AI strategy: it recently agreed to buy Fin for $3.6 billion to bolster Agentforce, but some analysts remain cautious about whether AI investments will convert into faster growth and better monetization.
• Despite the stock pullback, several analysts still have bullish price targets and point to strong cash generation, improving margins, and Salesforce’s $25 billion buyback plan as supports for shareholder returns.

Salesforce Inc. (NYSE:CRM - Get Free Report)'s share price dropped 4.2% during mid-day trading on Wednesday . The stock traded as low as $154.23 and last traded at $154.8820. Approximately 18,328,311 shares were traded during trading, an increase of 35% from the average daily volume of 13,531,799 shares. The stock had previously closed at $161.71.

More Salesforce News

Here are the key news stories impacting Salesforce this week:

• Positive Sentiment: Salesforce announced a $3.6 billion acquisition of Fin, a customer AI agent platform, which strengthens its Agentforce strategy and expands its push into AI-powered customer service. Several reports suggest the deal could help Salesforce capture more of the fast-growing agentic AI market. Article Title
• Positive Sentiment: Some analysts remain constructive, with buy ratings reaffirmed and price targets well above the current share price, citing strong cash generation, rising margins, and Salesforce’s large buyback program as support for shareholder returns. Article Title
• Neutral Sentiment: UBS reaffirmed its neutral rating on Salesforce, reflecting a wait-and-see stance as investors gauge whether AI investments will translate into faster growth and improved monetization. Article Title
• Negative Sentiment: Multiple articles and analyst notes highlight concerns that Salesforce’s AI growth path may be slower than hoped, with fair value estimates cut and questions raised about execution, unit economics, and the pace of revenue reacceleration. Article Title
• Negative Sentiment: Commentary also notes that CRM has fallen sharply this year, with some reports blaming the acquisition spree and broader skepticism about whether management can turn AI investments into durable growth, which is weighing on sentiment. Article Title

Analysts Set New Price Targets

CRM has been the subject of several analyst reports. Canaccord Genuity Group restated a "buy" rating and set a $225.00 target price on shares of Salesforce in a research report on Tuesday. Citizens Jmp restated a "market outperform" rating and set a $315.00 target price on shares of Salesforce in a research report on Thursday, May 28th. Roth Mkm restated a "buy" rating and set a $325.00 target price on shares of Salesforce in a research report on Thursday, May 28th. Stifel Nicolaus decreased their target price on Salesforce from $300.00 to $250.00 and set a "buy" rating for the company in a research report on Thursday, February 26th. Finally, Piper Sandler lowered Salesforce from an "overweight" rating to a "neutral" rating in a research report on Thursday, May 28th. One research analyst has rated the stock with a Strong Buy rating, twenty-six have assigned a Buy rating, ten have issued a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average target price of $259.26.

Salesforce Price Performance

The company has a debt-to-equity ratio of 1.15, a quick ratio of 0.79 and a current ratio of 0.79. The company has a 50-day moving average of $179.14 and a 200-day moving average of $205.79. The firm has a market capitalization of $126.85 billion, a price-to-earnings ratio of 17.93, a price-to-earnings-growth ratio of 1.02 and a beta of 1.16.

Salesforce (NYSE:CRM - Get Free Report) last issued its quarterly earnings data on Wednesday, May 27th. The CRM provider reported $3.88 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.13 by $0.75. Salesforce had a return on equity of 18.72% and a net margin of 18.73%.The business had revenue of $11.13 billion during the quarter, compared to analyst estimates of $11.05 billion. During the same period in the previous year, the firm earned $2.58 EPS. Salesforce's quarterly revenue was up 13.3% compared to the same quarter last year. 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, research analysts anticipate that Salesforce Inc. will post 10.29 EPS for the current fiscal year.

Salesforce Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, July 2nd. Investors of record on Thursday, June 11th will be given a $0.44 dividend. The ex-dividend date is Thursday, June 11th. This represents a $1.76 annualized dividend and a dividend yield of 1.1%. Salesforce's payout ratio is currently 20.37%.

Salesforce declared that its Board of Directors has initiated a stock buyback plan on Monday, March 16th that allows the company to repurchase $25.00 billion in shares. This repurchase authorization allows the CRM provider to repurchase up to 14.1% of its stock through open market purchases. Stock repurchase plans are generally a sign that the company's board believes its shares are undervalued.

Insider Activity

In other Salesforce news, Director Laura Alber acquired 2,571 shares of the firm's stock in a transaction that occurred on Thursday, March 19th. The stock was acquired at an average cost 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. This trade represents a 36.94% increase in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Corporate insiders own 3.50% of the company's stock.

Hedge Funds Weigh In On Salesforce

A number of large investors have recently bought and sold shares of CRM. J. Stern & Co. LLP boosted its holdings in shares of Salesforce by 24,056.7% in the 4th quarter. J. Stern & Co. LLP now owns 47,385,511 shares of the CRM provider's stock valued at $12,552,896,000 after buying an additional 47,189,352 shares during the last quarter. Norges Bank acquired a new stake in Salesforce during the 4th quarter valued at $3,182,951,000. Capital World Investors lifted its holdings in Salesforce by 159.0% during the 3rd quarter. Capital World Investors now owns 17,325,206 shares of the CRM provider's stock valued at $4,106,255,000 after purchasing an additional 10,636,161 shares during the last quarter. Arrowstreet Capital Limited Partnership lifted its holdings in Salesforce by 130.2% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 12,659,217 shares of the CRM provider's stock valued at $2,363,096,000 after purchasing an additional 7,160,302 shares during the last quarter. Finally, Cardano Risk Management B.V. lifted its holdings in Salesforce by 924.7% during the 4th quarter. Cardano Risk Management B.V. now owns 3,883,610 shares of the CRM provider's stock valued at $1,028,807,000 after purchasing an additional 3,504,605 shares during the last quarter. Institutional investors and hedge funds own 80.43% of the company's stock.

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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