Salesforce Inc (CRM)

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Salesforce shares climb as growth forecast, buyback plan appease investors
By: Investing.com | March 2, 2023

(Reuters) - Shares of Salesforce (NYSE:CRM) Inc jumped 15% in premarket trade on Thursday after the cloud-based software provider's revenue forecast eased concerns about slowing growth and its move to double its share repurchase to $20 billion appeased investors.

Salesforce has been targeted by four activist investment firms — including Elliott Management Corp which has nominated directors to its board – pushing for changes at the company that posted its slowest quarterly revenue growth since it went public in 2004.

Still, Salesforce's first-quarter revenue forecast implied growth of 10%, higher than analysts' estimates of 9%. It also expects full-year adjusted operating profit margins to increase, prompting at least 16 brokerages to raise their price target on the company's stock.

The business software maker's plan to integrate artificial intelligence into all of its cloud as well as Slack, data analytics platform Tableau and MuleSoft platform also gave a fillip to the stock.

Brokerage firm Barclays (LON:BARC) Salesforce's short-term bookings, improving the productivity of sales representatives and the disbanding of the mergers and acquisition committee as signs that the business is on track for sustained profitable growth.

Elliott, which had been in talks with Salesforce leading up to the earnings statement, said "today's announcements represent progress towards regaining investor trust".

Other activist investors with a stake in Salesforce include Starboard Value, Inclusive Capital Partners and ValueAct Capital. They have pushed for higher growth and margins, more share buybacks and raised concerns about recent acquisitions.

Shares of Salesforce have advanced 26% this year through Wednesday's close, compared with a near 3% gain in the benchmark S&P 500 index.

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