Salesforce Stock Is Tumbling Thursday: What's Going On?

Zinger Key Points
  • Salesforce misses revenue estimates for the first time in more than a decade.
  • Multiple analysts lower price targets on the stock following the company's quarterly results.

Salesforce Inc CRM shares are trading lower Thursday after the company reported first-quarter financial results and issued weak guidance for the second quarter. Multiple analysts also lowered price targets following the print.

  • Q1 Revenue: $9.13 billion, versus estimates of $9.147 billion
  • Q1 EPS: $2.44, versus estimates of $2.38

Salesforce reported its first top-line miss in more than a decade late Wednesday, according to Benzinga Pro. Despite missing estimates, first-quarter revenue was up 11% on a year-over-year basis.

Cash flow from operations was up 39% year-over-year to $6.25 billion. Free cash flow increased 43% to $6.08 billion. The company ended the quarter with remaining performance obligations of $26.4 billion, up 10% year-over-year.

"We are at the beginning of a massive opportunity for our customers to connect with their customers in a whole new way with AI. As the world's #1 AI CRM, we're incredibly well positioned to help companies realize the promise of AI over the next decade," said Marc Benioff, chair and CEO of Salesforce. 

Guidance: Salesforce sees second-quarter revenue in the range of $9.2 billion to $9.25 billion versus estimates of $9.34 billion. The company anticipates second-quarter adjusted earnings of $2.34 to $2.36 per share versus estimates of $2.40 per share.

Salesforce expects full-year 2025 revenue to range from $37.7 billion to $38 billion versus estimates of $37.98 billion. The company sees full-year adjusted earnings between $9.86 and $9.94 per share versus estimates of $9.76 per share.

See Also: Apple Reportedly Strikes Deal With Sam Altman-Led OpenAI To Integrate ChatGPT Into iOS 18, Possibly Amid Internal Opposition

Analyst Changes:

  • Piper Sandler analyst Brent Bracelin maintained Salesforce with a Neutral and lowered the price target from $300 to $250.
  • Baird analyst Rob Oliver maintained Salesforce with an Outperform and lowered the price target from $355 to $295.
  • Morgan Stanley analyst Keith Weiss maintained Salesforce with an Overweight and lowered the price target from $350 to $320.
  • Needham analyst Scott Berg reiterated Salesforce with a Buy and maintained a price target of $345.

CRM Price Action: Salesforce shares were down 16.7% at $226.18 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Salesforce.

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