This article first appeared on GuruFocus.
Salesforce (NYSE:CRM) stock is under duress, even after beating Wall Street’s expectations in the second quarter. The numbers were solid, but investors weren’t wowed by the guidance.
For the July quarter, Salesforce delivered adjusted EPS of $2.91 versus the $2.78 estimate, with revenue of $10.24 billion topping forecasts of $10.14 billion. CEO Marc Benioff called it an outstanding quarter, pointing to nearly $15 billion in operating cash flow expected this year and customer wins from Pfizer to the U.S. Army.
Still, the outlook dampened enthusiasm. Q3 adjusted EPS is pegged at $2.85, basically in line with the Street’s $2.84. Revenue guidance of $10.24 billion $10.29 billion barely missed the midpoint estimate of $10.28 billion. Full-year EPS was raised slightly to $11.35, with revenue of $41.1 billion$41.3 billion essentially matching consensus.
Analysts say it’s more about sentiment than fundamentals. With the stock trading almost 50% below its 5-year average multiple, Salesforce’s steady growth looks overlooked in a market still chasing flashier AI stories.
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