Send me real-time posts from this site at my email
Motley Fool

Why Salesforce Stock Dropped Today

What happened

Shares of Salesforce.com (NYSE: CRM) dropped by as much as 5% today after enterprise software peer SAP (NYSE: SAP) reported third-quarter results and issued a gloomy outlook going forward. As of 3:20 p.m. EDT, the stock was down 4%. The broader market is also tanking as COVID-19 cases in the U.S. have hit fresh records in recent days.

So what

SAP cut its full-year outlook due to ongoing impacts from the COVID-19 pandemic. The software giant now expects adjusted revenue of 27.2 billion to 27.8 billion euros ($32.1 billion to $32.8 billion) in 2020, down from its prior forecast of 27.8 billion euros to 28.5 billion euros ($32.8 billion to $33.7 billion).

Image source: Salesforce.

"The COVID-19 pandemic [ ... ] is expected to impact the demand environment, particularly in hard hit industries, through at least the first half of 2021," according to SAP. The company's previous outlook was issued in April, but much has changed since then, and some regions have been implementing fresh lockdown orders in an effort to contain the contagion, which is hurting customer demand.

Now what

SAP is a global software company. So its forecast has broad implications for the entire sector. Salesforce and SAP have long competed in the market for customer-relationship management (CRM) software, although SAP said earlier last month that it would shift its focus from mainstream customers to specific segments of the CRM market.

Salesforce's own guidance for this fiscal year calls for revenue of $20.7 billion to $20.8 billion, which would represent growth of 21% to 22%.

10 stocks we like better than Salesforce.com
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Salesforce.com wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of October 20, 2020

Evan Niu, CFA owns shares of Salesforce.com. The Motley Fool owns shares of and recommends Salesforce.com. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue