Salesforce (CRM) stock is the worst Dow Jones stock Thursday after the software-as-a-service (SaaS) firm reported mixed results for its fiscal 2025 fourth quarter and issued a weaker-than-expected outlook for fiscal 2026.
In the three months ending January 31, Salesforce said its revenue increased 7.6% year over year to $9.99 billion. Its earnings per share (EPS) rose 21.4% from the year-ago period to $2.78.
"We had an incredible quarter and year, with strong performance across all our key metrics, including the highest cash flow in our company's history and more than $60 billion in RPO," said Salesforce CEO Marc Benioff in a statement.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Benioff added that Salesforce is best-positioned to "lead customers through the digital labor revolution" and is able to "seamlessly integrating our Customer 360 apps, Data Cloud and Agentforce." As a result, the company is able to deliver "unprecedented levels of productivity, efficiency and cost savings for thousands of companies."
The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $10.04 billion and earnings of $2.61 per share, according to MarketWatch.
For fiscal year 2026, Salesforce said it expects to achieve revenue in the range of $40.5 billion to $40.9 billion and earnings of $11.09 to $11.17 per share. These forecasts came up short of analysts' expectations for revenue of $41.35 billion and earnings of $11.18 per share.
For its fiscal first quarter, Salesforce anticipates revenue in the range of $9.71 billion to $9.76 billion and earnings between $2.53 to $2.55 per share. Analysts, meanwhile, are calling for fiscal Q1 revenue of $9.9 billion and earnings of $2.61 per share.
Is Salesforce stock a buy, sell or hold?
Salesforce has lagged the broader market over the past 12 months, up 2.9% on a total return basis (price change plus dividend) through its February 26 close vs the S&P 500's 19.1% gain. But Wall Street remains bullish on the tech stock.
According to S&P Global Market Intelligence, the average analyst target price for CRM stock is $386.95, representing implied upside of roughly 30% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Wedbush maintained its Outperform rating (equivalent to a Buy) on the blue chip stock following the earnings release, along with its $425 price target.
"The monetization of Agentforce [Salesforce's AI platform] is still in the early stages of playing out, and we believe that the company is taking a prudent approach to scaling the Agentforce that will pay off over the long term with the AI Revolution now entering the software phase," wrote Wedbush analyst Daniel Ives in a note this morning.
Related Content
-
Risk Is Off Again, Dow Falls 397 Points: Stock Market TodayMarket participants are weighing still-solid earnings against both expectations and an increasingly opaque economic picture.
-
I Inherited $50,000, and My Retirement is Already Fully Funded. Where's the Best Place to Store It for Maximum Growth?These savings solutions can help you maximize returns without the risk.
-
Risk Is Off Again, Dow Falls 397 Points: Stock Market Today
Market participants are weighing still-solid earnings against both expectations and an increasingly opaque economic picture.
-
A Broad Approach to Innovative Trends Helps This SPDR ETF OutperformThe SPDR S&P Kensho New Economies Composite's bets on transformational technologies have sparked volatility – and big gains – this year.
-
The Best Invesco ETFs to BuyInvesco's expansive and diverse ETF lineup includes multiple notable candidates for serious investors. Here are the best Invesco ETFs to buy.
-
Parents and Caregivers: Don't Miss Your Roth Conversion WindowCaring for a child or parent can mean a drop in income and a lower tax bracket. Why not take advantage by moving money into a Roth account? Here's how it works.
-
Testing the Retirement Waters in Florida? A Partial Plunge May Negate Tax BreaksMost folks know Florida is a tax-friendly state, but they might not know that part-time residents may not qualify, as our cautionary tale shows.
-
Catch-Up Contributions for Higher Earners in 457(b) Plans: What You Need to KnowGovernment 457(b) plans are about to get more complex as new Roth catch-up requirements come into force. Here's how to prepare for the changes.
-
Stocks Rally as Investors Buy the Dip: Stock Market TodayMost sectors are "go" only a day after talk of bubbles, extended valuations and narrow breadth undermined any kind of exuberance.
-
Elon Musk's $1 Trillion Pay Package Passes: What's at Stake for Tesla StockMore than 75% of Tesla shareholders voted to approve a massive pay package for CEO Elon Musk. Here's what it means for the Mag 7 stock.
