Salesforce Stock Sinks to the Bottom of the Dow After Earnings
Salesforce stock tumbled out of the gate Thursday after the tech giant reported mixed fourth-quarter results and issued a soft forecast for the year ahead.
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
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
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
-
Tax Season 2026 Is Here: 8 Big Tax Changes to Know Before You FileTax Tips Due to several major tax rule changes, your 2025 return might feel unfamiliar even if your income looks the same.
-
The New Rules of RetirementPopular guidelines about how to save, invest and spend need to be updated and personalized to ensure you'll never run out of money.
-
Humanoid Robots Are About to be Put to the TestThe Kiplinger Letter Robot makers are in a full-on sprint to take over factories, warehouses and homes, but lofty visions of rapid adoption are outpacing the technology’s reality.
-
A Value Focus Clips Returns for This Mairs & Power Growth FundRough years for UnitedHealth and Fiserv have weighed on returns for one of our favorite mutual funds.
-
Small-Cap Stocks Gain Momentum. That's Good News for This iShares ETFThe clouds appear to be parting for small-cap stocks, which bodes well for one of our favorite exchange-traded funds.
-
Don't Let a 60/40 Portfolio Derail Your Retirement: Why a Cookie-Cutter Approach Could Cost YouChoosing a personalized retirement investment plan, rather than relying on the 60/40 portfolio, could help protect your savings and ensure long-term growth.
-
Are You Winging Your Retirement Plan? A Wealth Adviser's Tips to Help Build Wealth and Navigate RiskIf you have no strategy tying together your accounts or haven't modeled scenarios to make sure your savings will last, then your plan is probably inefficient.
-
Divide and Conquer: Your Annual Financial Plan Made Easy, Courtesy of a Financial AdviserOverwhelmed by your financial to-do list? Split it into four quarters and assign each one goals that connect to the time of year. It could be life-changing.
-
Nasdaq Leads Ahead of Big Tech Earnings: Stock Market TodayPresident Donald Trump is making markets move based on personal and political as well as financial and economic priorities.
-
11 Stock Picks Beyond the Magnificent 7With my Mag-7-Plus strategy, you can own the mega caps individually or in ETFs and add in some smaller tech stocks to benefit from AI and other innovations.
-
Why ETFs Are One of the Easiest Ways to Start InvestingBroad diversification, low fees and the ability to buy fractional shares make ETFs one of the easiest ways to start investing.
