What Happened:
Shares of customer relationship management software maker Salesforce (NYSE:CRM) fell 5.85% in the after-market session after the company reported first quarter results that beat analysts' revenue, remaining performance obligations (RPO, a leading indicator of revenue), free cash flows, and earnings per share expectations (EPS) expectations. On the other hand, revenue guidance for the full year was reiterated and slightly missed analysts' expectations while implied full-year non-GAAP operating profit was ahead. For the next quarter, revenue and cRPO (current RPO) were roughly in line. Management highlighted plans to infuse AI into its entire product portfolio, but also pointed to macro uncertainty, longer deal cycles, deal compression, and some project delays. Overall, it was a solid quarter with slightly underwhelming guidance, and some cautious commentary.
What is the market telling us:
Salesforce's shares are quite volatile and over the last year have had 14 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Salesforce is up 56.1% since the beginning of the year, and at $211.06 per share it is trading close to its 52-week high of $223.38 from May 2023. Investors who bought $1,000 worth of Salesforce's shares 5 years ago would now be looking at an investment worth $1,610.
Is now the time to buy Salesforce? Access our full analysis of the earnings results here, it's free.