Salesforce stock dips after earnings beat, new co-CEO announcement

Yahoo Finance’s Jared Bilkre reports lower earnings for Salesforce shares.

Video transcript

JARED BLIKRE: Well, it's time now to turn to an earnings report. This is Salesforce, but I'm going to-- oh, you know what I'm going to do? I'm going to bury the lead here. I'm going to go ahead and talk about the new co-CEO. Marc Benioff now has a compatriot, who's going to be working alongside him. And his name is Brett Taylor. And he comes from the C-suite. He's been there for a number of years.

And I do have some comments by Wedbush's Dan Ives. Salesforce is going through a transformation in terms of going through from a vertically integrated one trick pony in CRM to a broader platform. Right now, it's in an arms race in cloud computing, and Salesforce needs to make sure to stay on the offensive.

And let's go to the YFi Interactive and chart, the software sector. This is what's happening today. I just want to show what's happened over the last month, because there's a lot of red on the screen. I'm going to sort by performance here. You can see a lot of these names have simply been not decimated, but it's not looking good for a lot of them. So I'm going to go back here and put up a chart of Salesforce. You can see year-to-date, they're still holding onto gains of about 20% over the last two years. You can see, not a bad uptrend there, 65%, but not the growth company that they want to be.

So let me just give some of the analyst commentary around their earnings report. And this has to do, the stock being down today with a weak revenue and profit forecast. So Piper Sandler, they recommend the stock with an overweight rating with a price target of $365. They're saying Salesforce, their fourth quarter guidance reflects currency headwinds and revenue recognition headwinds from the licensed components of MuleSoft and Tableau businesses.

Still, Sales Cloud growth was the highest in over three years. And aside from this, the company's results, they showed strong adoption of Cloud products and tight cost controls. Also noting-- Dan Ives noting that the integration with Slack not going as well as investors had hoped. They paid $27.7 billion for that, completed in July. And so, lots to unpack there, but that is what we have from Salesforce.