Not only is the ground in the San Francisco Bay Area saturated but so is the cloud market pioneered by Salesforce Inc.
Not only is the ground in the San Francisco Bay Area saturated, but so is the cloud market pioneered by Salesforce Inc. and on top of margin pressure and lower quality earnings, one analyst downgraded the stock of the customer-relations management software giant.
On Wednesday, Bernstein analyst Stacy Rasgon downgraded Salesforce CRM to underperform from market perform because it has fallen into “growth purgatory.” “With the tailwinds from M&A no longer enough, core markets approaching cloud saturation, competition increasing, and macro issues hitting growth, management is aggressively pivoting to driving margins,” Rasgon said. “But the cuts are going to negatively impact efficiency, growth, and customer/employee satisfaction. Margin improvement will be less than expected in our view, and will appear over multiple years.
Of the 50 analysts who cover Salesforce, 38 have buy-grade ratings, 10 have hold ratings, and one has a sell rating, along with an average target price of $188.90.
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