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San Francisco-based Salesforce, Inc. (CRM) reigns as the premier provider of on-demand CRM software, revolutionizing sales, marketing, customer service, and custom application development. Boasting a market cap of $285 billion, it delivers a powerful technology platform that enables businesses and developers to craft and operate cutting-edge applications.
Companies worth $200 billion or more are generally classified as “mega-cap stocks.” Salesforce's market cap exceeds the mega-cap threshold, highlighting its size, stability, and influence in the tech sector. Acclaimed for its relentless innovation and commitment to excellence, Salesforce continually delivers state-of-the-art solutions, setting new benchmarks in customer relationship management. The company has transformed the CRM industry with its cloud-based platform, renowned for its affordability, seamless user experience, and exceptional versatility.
The software titan hit its 52-week high of $369 on Dec. 4 but has since pulled back 19.3% from that peak. Moreover, shares of Salesforce have dropped 9.8% over the past three months, compared to the iShares Expanded Tech-Software Sector ETF’s (IGV) 6.6% fall.
Despite the short-term weakness, CRM has gained 15% over the last six months, though it has remained nearly flat over the past year. In comparison, IGV has risen 14.3% in six months and 14.1% over the past year.
CRM has stayed above its 200-day moving average since the end of September but has been trading under its 50-day moving average since early February.
On Feb. 26, Salesforce reported its fourth-quarter earnings, prompting a 4% drop in its stock the following trading session. While the adjusted EPS of $2.78 exceeded expectations of $2.60, revenue came in at $9.99 billion, which was below forecasts. Despite a 7.5% year-over-year sales increase and a 21.4% rise in adjusted EPS, weaker forward guidance dampened investor sentiment.
The company posted $900 million in AI and data cloud revenue, reflecting 120% growth. For fiscal 2025, Salesforce projects revenue between $40.5 billion and $40.9 billion, falling short of analysts' $41.4 billion estimate. It also expects a 34% adjusted operating margin and 10%-11% growth in operating cash flow. While the guidance leans conservative, the company's fundamentals remain strong.
Salesforce has been outpacing its main competitor, Adobe Inc. (ADBE), with shares of ADBE plunging 20.5% over the past 52 weeks and down 21.8% over the past six months.
Given CRM’s solid industry dominance, analysts are very optimistic about the stock’s potential. The stock has a consensus rating of “Strong Buy” from 46 analysts covering it, and its mean price target of $390.53 implies a potential upswing of 31.1% from the prevailing price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
