Salesforce's Stunning Decline Gives Investors an Exceptional Buying Opportunity
Salesforce (NYSE: CRM) stock reacted to the Federal Reserve raising interest rates the same as most technology companies -- its share price fell 34% over the last year. Worse, the slowing economy is only just starting to impact the company's growth outlook, with guidance for revenue in the fiscal fourth quarter disappointing investors. Consequently, the stock sank to a 52-week low on Dec. 22, and the risk of it falling below those lows again remains significant.
Considering that most economists believe the world is on the precipice of a global recession, should investors abandon the stock, or take a contrarian view and buy near its recent lows?
Things began going downhill for Salesforce in July 2022, when it started experiencing foreign currency headwinds and a downturn in sales due to the poor macro environment. Recently, CEO Marc Benioff said that customers' buying behavior "reflects a lot of what we've seen" during financial crises the company experienced in 2001, 2008, and 2009. And no Salesforce investor wants to hear that companies are slowing distribution capacity expansion, failing to add service people, freezing hiring, laying off workers, and halting marketing spending: When other companies restrict expenditures on marketing, they hurt Salesforce's growth, as a big part of what it does is help its customers with sales- and marketing-related activities. Management now anticipates business fundamentals deteriorating, so the company recently announced a layoff of 10% of its workforce.
Source Fool.com
