Salesforce Stock (NYSE:CRM)
In premarket trading on Thursday, Salesforce stock was down slightly after the investment company Baird downgraded the cloud computing giant. The firm cited adverse macro circumstances and the recent departure of two senior executives as reasons for the downgrade.
Analyst Rob Oliver dropped his recommendation on Salesforce stock from outperform to neutral, stating that the company’s revenue growth might be impacted by the deteriorating global economy and “seat-based software pressure” due to recent layoffs and recruiting slowdowns at some of the company’s clients. Oliver also said that the rating resulted from the analyst noting that the failing worldwide economy could impact the company’s revenue growth.
Oliver said he did not want to speculate on why co-CEO Brett Taylor, Slack co-founder Stewart Butterfield, and other Salesforce (NYSE:CRM) leaders were departing. However, it may contribute to “execution risk.” This was about the exits of other Salesforce (CRM) executives.
In a letter to clients, Oliver stated that “although we do not wish to conjecture the logic behind these departures, we feel the recent leadership change adds some execution risk, especially given the volume of it.” “Even though we are not shocked to see Slack leaving in the aftermath of Taylor’s revelation (he was the advocate of the Slack purchase), it nonetheless indicates greater risk,”
Other Salesforce professionals, such as Chief Product Officer Tamar Yehoshua and Senior VP of Marketing, Brand, and Communications Jonathan Prince, have departed the company in recent months.
In addition, Oliver pointed out that the current economic slowdown, which Salesforce mentioned during its results call for the third quarter, might lead to revenue pressure in 2023, as marketing expenditure is “easy/quick to pull back” and there was less growth of sales and services in additional hires. Salesforce called out these trends in its earnings call.
As a consequence of this, the analyst reduced his projections for the next fiscal year, 2024.
Amy Weaver, the Chief Financial Officer of Salesforce, was a speaker at a conference hosted by UBS earlier this week. She emphasized that the exits of Taylor and Butterfield, in particular, “are either entirely separate occurrences,” even though “people love to attempt to make the connections.”
Featured Image: Megapixl @ Andreistanescu
Author Shariq Khan 
