Salesforce stock price in 5 years: Can CRM shares bounce back after executive departures, mass layoffs?
It’s been a time of change for Salesforce (CRM). The customer relationship management specialist has seen its stock price tumble after enduring a tough 2022.
An executive departure and mass lay-offs have been among the challenges faced by the business, and investors have felt the brunt of the uncertainty.
Salesforce (CRM) live stock price
But is there better news on the horizon? Are there realistic prospects of the stock price recovering some of its lost ground, or are there still lingering concerns?
In this Salesforce stock forecast we take a look at the company’s recent results, assess the impact of the departures, and ask analysts what they predict will happen in the long term.
What is Salesforce?
Let’s start our CRM stock forecast with some history. Founded in 1999, the company is a leading name in customer relationship management (CRM) platforms.
Its technology, which includes the Customer 360 platform, helps bring companies and customers together. In fact, more than 150,000 companies use Salesforce CRM, as of December 2022.
Salesforce successfully completed its initial public offering (IPO) on the New York Stock Exchange (NYSE) on 23 June 2004. It raised $110m at $11 a share. It trades under the ‘CRM’ ticker.
In May 2022, the company announced it had been ranked the number one CRM provider by the International Data Corporation. This is the ninth consecutive number one ranking it’s achieved.
What is your sentiment on CRM?
Salesforce share price struggles in 2022
The CRM stock price has had a 2022 to forget. It fell 47% from $255.46 in early January to $135.62 at market close on 13 December, 2022.
The drop has been attributed to a combination of factors, including deteriorating economic conditions in the US and the unexpected departure of a senior executive.
Over the longer term, however, the CRM stock price performance has been more encouraging with a 33% increase during the past five years as of 14 December. The all-time high Salesforce stock closing price was the $309.96 achieved on 8 November 2021.
As of 14 December, the company was the 86th most valuable in the world by virtue of its $135.61bn market capitalisation, according to CompaniesMarketCap. It’s also the sixth largest software company and number 21 in the list of top technology firms.
Latest earnings reveal growing revenues yet net income falls
Any CRM stock forecast must consider how the company has been performing, and a great place to start is to look at its most recent results.
On 30 November 2022, the company reported revenue of $7.84bn for the third quarter of fiscal 2023, up 14% year-on-year. Gross profit came in at $5.75bn, up from $5.02bn for the same period last year, while net income was down from $468m to $210m.
In a statement, Marc Benioff, Salesforce’s chair and co-chief executive, insisted there’s never been a more important time for customers to connect with their customers.
“We’re grateful to our customers for their commitment, especially as we help them succeed in this challenging environment,” he said.
The company’s results also highlighted GAAP earnings per share of $0.21, as well as the returning of $1.7bn to shareholders in the form of share repurchases in the third quarter.
Amy Weaver, Salesforce’s president and CFO, said: “We delivered another quarter of double-digit top and bottom line growth. In this time of economic uncertainty, we remain committed to profitable growth and consistent operating margin expansion.”
Company departures
On the same day that third quarter figures were released, Salesforce announced that Bret Taylor will step down as the company’s vice chair and co-chief executive on 31 January, 2023.
However, observers didn’t seem to be overly concerned by the news. Dan Romanoff, senior equity analyst at Morningstar, believed the company can cope with the departure. He said:
Romanoff also emphasised that Benioff remains at the helm, and pointed out there were no immediate other changes aside from the lack of an immediate succession plan.
Taylor’s departure isn’t the only change in company personnel. Early in November it was revealed by Bloomberg that Salesforce had cut hundreds of workers from sales teams as it sought to improve profitability.
It’s unclear whether further rounds of layoffs are on the cards. Business Today reports has quoted unnamed employees warning that new sales targets had been set.
Salesforce stock forecast for the next 5 years
What are analysts’ latest long-term Salesforce stock predictions?
The stock was rated as a ‘strong buy’, based on the views of 35 analysts compiled by TipRanks as of 14 December. Of those, 27 had a ‘buy’ recommendation in place and eight a ‘hold’.
Their consensus Salesforce share price forecast suggested the stock could rise to $197.93. The highest prediction was $300 and the lowest $150.
Elsewhere, the stock was a ‘moderate buy’ based on the views of 36 analysts compiled by MarketBeat at the time of writing (14 December). One recommended a ‘strong buy’ and 27 a ‘buy’. A further eight saw it as a ‘hold’.
Their consensus view was that the stock could rise to $197.50 over the coming year. The highest prediction was $360 and $150 the low.
Meanwhile, according to the algorithmic forecasts of Wallet Investor, the stock was a “not so good long-term investment” with only the likelihood of a modest price increase to $141.50.
The site’s Salesforce stock forecast for 2025 suggested that the stock could reach $165.17 by December 2025. Meanwhile, Wallet Investor’s Salesforce stock forecast in 5 years put the price up to $181.31 by December 2027.
Dan Romanoff, senior equity analyst at Morningstar, had a fair value estimate of $222 on the stock, noting that its management had highlighted a healthy sales pipeline.
In his Salesforce stock forecast, the analyst pointed out that the company had “delivered modest upside” during the third quarter. He said:
He also appeared optimistic about its future prospects and that margins could continue to climb over the coming months, noting:.
“We are impressed by the company’s profitability performance during the quarter and continue to think this should help propel the stock once macro pressures ease.”
Romanoff also noted that the non-GAAP operating margin was 22.7%, compared with 19.8% last year and 19.9% in the previous quarter.
“Management is committed to hitting its goal of 25% in fiscal 2026 despite current economic challenges,” he said. “We think margins can continue to climb beyond management’s midterm target.”
Final thoughts
Note that making long-term predictions is a complicated endeavour. There are many uncertainties at play. Analysts and algorithm-based predictions can be wrong. They shouldn’t be used as a substitute for your own research.
Always conduct your own due diligence before trading, looking at the latest technical and fundamental analysis, and a wide range of commentary. Remember, past performance does not guarantee future returns. And never trade money you cannot afford to lose.
FAQs
Is Salesforce a good stock to buy?
You will need to draw your own conclusions from analysing the company data and looking at its future prospects. A lot can happen to a stock over five years, so you’ll need to be very careful when you’re putting together realistic projections.
Always conduct your own due diligence before trading, looking at the latest technical and fundamental analysis, and a wide range of commentary. Remember, past performance does not guarantee future returns. And never trade money you cannot afford to lose.
Will Salesforce stock go up or down?
Even the experts can be wrong with their Salesforce stock predictions. However, the consensus view of analysts was that the price could rise to $197.93, according to analysts’ views compiled by TipRanks as of 14 December. The highest prediction recorded was $300, while the lowest warned of a fall to $150. Note that their price targets shouldn’t be used in place of your own research.
Should I invest in Salesforce stock?
Whether you should invest in Salesforce stock will depend on your opinion of the company and an assessment of its future prospects, as well as your personal investment aims and objectives.
Remember never to invest what you can’t afford to lose.
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