Should Investors Buy the Post-Earnings Dip in Salesforce (CRM) Stock?

Despite posting favorable Q2 results after market hours on Wednesday, Salesforce CRM stock dropped as much as 12% in today’s trading session before paring back some of its early morning losses.As the leading provider of on-demand customer relationship management software, investors may be wondering if now is an opportune time to buy Salesforce stock for a rebound, as CRM shares have struggled amid slower growth and lofty expectations.To that point, Salesforce stock is now down nearly 30% YTD, but is still sitting on respectable gains of almost +60% in the last three years, although this has trailed the broader indexes and its Zacks Computer-Software Market’s gains of roughly +100%.Image Source: Zacks Investment Research Salesforce's Favorable Q2 ResultsReporting Q2 sales of $10.23 billion, Salesforce’s top line expanded 10% from $9.32 billion in the comparative quarter and topped estimates of $10.13 billion. On the bottom line, Q2 earnings came in at $2.91 per share, increasing 13% from EPS of $2.56 a year ago and topping expectations of $2.77 by 5%.Reassuringly, Salesforce highlighted that revenue from its AI and data product line was up 120% year over year, as there have been concerns about the company's ability to capitalize on artificial intelligence endeavors like other large-cap tech firms. Other noteworthy highlights included a 34.3% non-GAAP operating margin and an 11% spike in CRPO (Current Remaining Performance Obligation) at $29.4 billion.Regarding its CRPO of deferred revenue and backlog, Salesforce disclosed that it inked deals with notable companies like Dell DELL, Marriott MAR, U.S. Bank USB, the U.S. Army, and Lululemon LULU.   Salesforce Raises its Full-Year GuidanceWhile investors may have been looking for stronger guidance targets, Salesforce co-founder and CEO Marc Benioff did state the company is on track to close out its current fiscal year 2026 as a record year.  Salesforce expects to finish FY26 with nearly $15 billion in operating cash flow, increasing its growth range forecast to 12%-13%. Furthermore, Salesforce raised the low end of its full-year revenue guidance to between $41.1 billion-$41.3 billion, which would reflect approximately 8.5%-9% growth, with full-year non-GAAP operating margin expectations raised 10 basis points to 34.1%. Salesforce’s Reasonable P/E ValuationAlthough most of its growth metrics have slowed toward the single digits, Salesforce stock is trading at its most reasonable valuation in recent years at 22X forward earnings. This is nicely beneath the benchmark S&P 500’s 24X forward earnings multiple and its Zacks Computer-Software Industry average of 25X.More intriguing is that CRM shares are trading at a 43% discount to its 3-year median of 39X forward earnings and are well below a high of 75X during this period.Image Source: Zacks Investment Research Conclusion & Final ThoughtsInvesting in Salesforce stock has become more attractive after showcasing its ability to capitalize on AI and potentially fend off emerging customer relationship management software competitors like Microsoft MSFT. That said, there may still be better buying opportunities ahead, but Salesforce stock is starting to offer sound value at current levels.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Salesforce Inc. (CRM): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Marriott International, Inc. (MAR): Free Stock Analysis Report Dell Technologies Inc. (DELL): Free Stock Analysis Report U.S. Bancorp (USB): Free Stock Analysis Report lululemon athletica inc. (LULU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks