Market Commentary

Salesforce Finally Strikes Back to Send Shares Higher

Huzaifa Waseem · 1 minute read

Shares of Salesforce (CRM:US) are trading higher this week after the software business reported better-than-expected Q4 results and guidance.

Salesforce reported earnings per share of $1.68 on sales of $8.38 billion, beating the average analyst consensus for earnings of $1.36 per share on sales of $7.99 billion. Sales rose 14% year-over-year in the quarter ending January 31.

This quarter could mark a turning point for Salesforce as the company now places a higher priority on profits and margins. Several activist investors, including Third Point, Elliott Management, and Starboard Value, are pushing for board changes at Salesforce as they believe the stock is undervalued.

The push from activist investors, as well as a difficult macro environment, prompted Salesforce to slash 10% of its staff in January.

“I’ve been thinking a lot about how we came to this moment,” said CEO Marc Benioff. “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.” 

Salesforce expects to report earnings per share of $1.60-1.61 for this quarter on revenue of $8.17 billion, beating the consensus for EPS of $1.32 on sales of $8.05 billion.

The surge in CRM shares comes nearly 2 months after Congressman Daniel Goldman invested between $100,000 and $250,000 in the company’s stock, which now trades over 10% higher relative to Goldman’s entry price.

Earlier, Rep. Ro Khanna was buying CRM stock, including the $15,000 - $50,000 investment on January 09 when it closed at $147.10.

Salesforce shares closed at $186.59 on Thursday.