:max_bytes(150000):strip_icc()/CRMChart-b2581f74d2d04a67a072b90548a739ca.GIF "Salesforce Stock Moves Lower After Sales Guidance Disappoints—Key Levels to Watch")
Key Takeaways
- Salesforces shares moved lower in premarket trading Thursday after the cloud software maker issued current-quarter and full-year guidance that fell short of Wall Street’s expectations.
- Salesforce CFO Amy Weaver said that the company’s guidance accounts for foreign exchange pressures and continued weakness in professional services.
- The company announced a dividend of 40 cents per share and increased its share repurchase program by $10 billion.
- Salesforce shares may find resistance near the stock’s record close at $311.75 and support from an uptrend line around $240.
Cloud-based software maker Salesforce (CRM) surpassed Wall Street’s quarterly earnings expectations, announced its first ever dividend, and increased its share buyback program, but the company’s share price moved lower ahead of Thursday’s opening bell as its sales outlook disappointed investors.
The seller of customer relationship management software said it sees fiscal first-quarter revenue totaling between $9.12 billion and $9.17 billion. The median of that range comes in slightly below the $9.15 billion analysts had expected. The company expects 2025 fiscal year revenue of $37.7 billion to $38.0 billion, with the upper end of that band falling short of the $38.62 billion consensus. Moreover, the forecast midpoint implies top-line growth of just 8.6% from the 2024 fiscal year.
Salesforce’s chief financial officer Amy Weaver told analysts on the company’s earnings call that the full-year guidance accounts for foreign exchange pressures and continued weakness in professional services, adding that the forecast reflects a more measured buying environment.
In the fiscal fourth quarter ended Jan. 31, the company reported diluted earnings per share of $1.47 as revenue grew 11% over the previous year to $9.29 billion, topping Wall Street’s estimates.
The company also announced it will issue a dividend of 40 cents per share payable as of April 11 to shareholders at the close of business on March 14 and increase its share repurchase program by $10 billion.
“We’re thrilled to initiate our first-ever Salesforce dividend and increase our share buyback plan by $10 billion,” Salesforce CEO Marc Benioff said in the earnings statement. On the post earnings call, Benioff reiterated the company’s artificial intelligence (AI) credentials and said its Einstein AI Copilot tool will go live on Thursday.
Salesforce shares have continued trending higher following the 50-week moving average crossing above the 200-week moving average in late December to form a bullish golden cross pattern. Looking ahead, keep an eye on the stock’s record close at $311.75 set in November 2021 which could become a possible area of resistance. Also monitor a key uptrend line extending back to late 2022 that may provide support around $240.
Salesforce shares were down 1.8% at $294.48 in premarket trading about three hours before the opening bell.
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