Salesforce (CRM, Financial) shares have experienced a 1.94% decline today due to its recent fourth-quarter fiscal report. The company's earnings exceeded expectations, but sales fell short, impacting investor sentiment negatively despite stronger than expected earnings performance.
In its fourth-quarter, Salesforce (CRM, Financial) reported non-GAAP adjusted earnings per share of $2.78, surpassing the forecasted $2.60. Revenue for the quarter was $9.99 billion, falling short of analyst projections by $50 million. Nonetheless, this represents a 7.5% increase year-over-year, accompanied by a 21.4% rise in adjusted earnings per share. Notably, the company concluded its 2025 fiscal year with $900 million in data cloud and artificial intelligence (AI) revenue, marking a 120% increase year-over-year.
Looking to the future, Salesforce (CRM, Financial) forecasts sales between $40.5 billion and $40.9 billion for the current fiscal year, indicating a 7.5% growth year-over-year at the midpoint. However, this is below the average analyst expectations of approximately $41.4 billion. The adjusted operating margin is anticipated to reach 34%, with operating cash flow growth projected between 10% and 11%.
From a stock analysis perspective, Salesforce (CRM, Financial) is currently priced at $301.36, with a price-to-earnings (P/E) ratio of 47.38. While the stock's GF Value suggests it is "Modestly Overvalued," the GF Value of $266.62 can be viewed in detail here. Despite the moderate short-term valuation concerns, Salesforce's strategic direction, particularly in data cloud and AI, continues to position the company for growth.
The stock's financial health is backed by several strong indicators, including a high Piotroski F-Score of 9, indicating a very healthy situation. Additionally, revenue and earnings growth have been consistent, reflecting Salesforce's robust operational performance. However, investors should remain cautious of warning signs, such as the company's asset growth exceeding revenue growth over the past five years, which could indicate decreasing efficiency.
