Stocks Analysis by MarketBeat.com (Thomas Hughes) covering: Salesforce Inc. Read MarketBeat.com (Thomas Hughes)'s latest article on Investing.com
Salesforce stock plunged following tepid guidance, opening up a once-in-a-lifetime opportunity for investors.) stock went on sale following the Q1 release, providing investors a once-in-a-lifetime opportunity. It is not every day that a high-quality, industry-leading, blue-chip stock on track to deliver robust capital returns provides a 25% discount, so it likely won’t last long.
The takeaways from the analyst chatter are encouraging. The company’s soft guidance caused a reset of expectations, but the forecasts are still robust. The analysts see Salesforce.com as focusing on profitable growth in the near term rather than growth at all costs and being undervalued relative to its peers. Disciplined spending and its position within the industry should help sustain margin improvements, and AI is a tailwind.
Guidance is good but left the analysts cold because growth is weaker than expected and slowing from higher paces. The company forecasted a 7% to 8% revenue gain compared to the 8.5% gain expected by analysts, and the full-year outlook is equally tepid. Salesforce reiterated the revenue growth forecast but reduced the outlook for earnings growth. The salient point is that free cash flow growth was reiterated, leaving the outlook for capital return unchanged.
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