INFA - Salesforce: After Its 20% Post-Q1 Decline Is Not A Bargain (Rating Downgrade)

2024-05-30 11:44:08 ET

Summary

• Salesforce, Inc.'s expectations for an extended measured buying environment through FY 2025 is increasing investor angst over a potentially structural single-digit growth outlook.
• While strong Data Cloud uptake rates continue to demonstrate momentum and reinforce Salesforce's AI strategy, contributions remain insufficient in reversing the near-term pace of deceleration.
• The results accordingly increase execution risks ahead for Salesforce, with investors now pivoting focus from margin expansion to the underlying business' ability to preserve a sustained double-digit growth trajectory.

Salesforce, Inc. ( CRM ) stock has yet to regain its recently lost ground following speculation over the potential Informatica ( INFA ) acquisition in April, which has since fallen through . The stock’s tepid performance recently is likely the combined outcome of steadily rising capital costs in response to an increasingly structural higher for longer policy stance, as well as muted improvements in the broader enterprise spending environment....

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