Salesforce beat earnings but missed revenue projections due to slower AI adoption

From Nasdaq: 2025-03-02 23:57:07

Salesforce (NYSE: CRM) reported Q4 fiscal 2025 results with $9.99 billion in sales and earnings of $2.78 per share, surpassing estimates but falling short of revenue projections due to slower adoption of its AI platform. This led to a decline in stock price post-earnings announcement.

The company saw a 7.6% YoY revenue growth in Q4, reaching $9.9 billion, supported by $30.2 billion in remaining performance obligations. However, slower adoption of its AI system, Agentforce, impacted growth as businesses reevaluate spending amidst macroeconomic uncertainties.

Despite revenue growth and a 170 basis point increase in operating margin to 33.1%, Salesforce’s Q1 projections fell short of estimates, leading to a negative outlook for CRM stock. The Trefis High Quality Portfolio, with 30 stocks, offers less volatility and better returns compared to the S&P 500.

CRM stock performance has been volatile, with returns of 14% in 2021, -48% in 2022, 98% in 2023, and 28% in 2024. The current price near $295 trades at approximately 28x trailing earnings, below its historical P/E ratio. Despite concerns over Agentforce adoption, there may be potential upside for the stock.

Investors should consider Salesforce’s improving profitability and guidance for further margin expansion in 2025. While there is room for growth, monitoring how CRM’s peers fare on key metrics is essential. The Trefis Reinforced Value Portfolio has shown strong cumulative returns since 2016, providing a market-beating investment option.



Read more at Nasdaq: What’s Next For Salesforce Stock?