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Salesforce (CRM) shares experienced a significant decline on Thursday, making it the poorest performer on the Dow Jones index. This dip followed the release of the company’s mixed fiscal results for the fourth quarter of 2025, coupled with an outlook for fiscal 2026 that did not meet investor expectations.
For the quarter ending January 31, Salesforce reported a revenue increase of 7.6% year-over-year, totaling $9.99 billion. The earnings per share (EPS) also saw a considerable rise, jumping 21.4% compared to the same period last year, reaching $2.78.
CEO Marc Benioff expressed confidence in the company’s performance, stating, “We had an incredible quarter and year, with strong performance across all our key metrics, including the highest cash flow in our company’s history and more than $60 billion in RPO.”
Despite these positive metrics, Salesforce’s results fell short of analysts’ forecasts. Predictions estimated revenue of $10.04 billion and earnings per share of $2.61, as noted by MarketWatch.
Looking ahead to fiscal year 2026, Salesforce anticipates revenue between $40.5 billion and $40.9 billion, with EPS ranging from $11.09 to $11.17. These forecasts did not align with market expectations, which had estimated revenue of $41.35 billion and earnings of $11.18 per share.
For the first quarter of fiscal year 2026, Salesforce expects revenue in the range of $9.71 billion to $9.76 billion, and earnings between $2.53 and $2.55 per share. Analysts have projected a slightly higher revenue of $9.9 billion and EPS of $2.61.
Is Salesforce stock a buy, sell or hold?
Over the past year, Salesforce has underperformed compared to the broader market, with a total return of just 2.9% through February 26, while the S&P 500 soared by 19.1%. Nonetheless, analysts maintain a positive outlook on Salesforce as a tech investment.
According to S&P Global Market Intelligence, the average target price for CRM stock stands at $386.95, which suggests a potential upside of approximately 30% from current trading levels. The consensus recommendation remains a Buy.
Wedbush, a notable financial services firm, upheld its Outperform rating—essentially a Buy—following the earnings report, along with a price target of $425. Analyst Daniel Ives remarked on the early-stage monetization of Agentforce, Salesforce’s AI platform, stating that the company’s cautious strategy in scaling this initiative is likely to yield long-term benefits as the AI Revolution progresses into more sophisticated software applications.
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