Salesforce (CRM) Down 6.9% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Salesforce (CRM). Shares have lost about 6.9% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Salesforce due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Salesforce, Inc. before we dive into how investors and analysts have reacted as of late.

Salesforce Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Salesforce reported better-than-expected results for the fourth quarter of fiscal 2026. Fourth-quarter non-GAAP earnings were $3.81 per share, which beat the Zacks Consensus Estimate by 25.69%. The bottom line improved 37% year over year.

Salesforce’s fiscal fourth-quarter revenues of $11.2 billion surpassed the Zacks Consensus Estimate by 0.32% and increased 12% year over year. The growth in top and bottom lines reflected the benefits of CRM’s go-to-market strategy and sustained focus on customer success. The initiatives to integrate generative artificial intelligence (AI) into its offerings also boosted demand for Salesforce’s solutions during the reported quarter.

Salesforce’s Q4 Performance in Detail

Coming to CRM’s business segments, revenues from Subscription and Support (95.5% of total revenues) increased 13% year over year to $10.7 billion. Professional Services and Other (4.5% of total sales) revenues declined 3% to $526 million.

In the third quarter of fiscal 2026, Salesforce renamed its service offerings under the Subscription and Support segment to reference Agentforce. There were no changes in the allocation of revenues between these service offerings coming from this change. The renamed offerings are now called Agentforce Sales, Agentforce Service, Agentforce 360 Platform, Slack and Other, Agentforce Marketing and Agentforce Commerce, and Agentforce Integration and Agentforce Analytics.

Agentforce Sales revenues grew 8% year over year to $2.3 billion. Revenues from Agentforce Service increased 7% to $2.5 billion. Agentforce 360 Platform, Slack and Other revenues rose 37% to $2.7 billion. Agentforce Marketing and Agentforce Commerce were down 1% to $1.4 billion. The Agentforce Integration and Agentforce Analytics division recorded 3% year-over-year growth to $1.8 billion.

Revenues from the Americas (65% of total revenues) increased 9% year over year to $7.3 billion. Sales in EMEA (25%) grew 19% to $2.8 billion, while the Asia Pacific (10%) region’s revenues rose 14% to $1.1 billion.

Non-GAAP operating income was $3.84 billion, up 16.1% from the year-ago quarter’s $3.3 billion. Moreover, the non-GAAP operating margin expanded 110 basis points to 34.2%.

Salesforce’s Balance Sheet & Other Details

Salesforce exited the fiscal fourth quarter with cash, cash equivalents and marketable securities of $9.57 billion, down from $11.32 billion at the end of the previous quarter. CRM generated an operating cash flow of $5.46 billion and a free cash flow of $5.32 billion in the fourth quarter. In fiscal 2026, the company generated operating cash flow and free cash flow of $15 billion and $14.4 billion, respectively.

As of Jan. 31, the current remaining performance obligation (cRPO) was $35.1 billion, up 16% year over year. The company returned $4.33 billion to shareholders, including $3.94 billion in share repurchases and $391 million in dividends. In fiscal 2026, it paid $1.59 billion in dividends and bought back shares worth $12.6 billion.

Salesforce Initiates Guidance for Q1 and FY27

For the fiscal first quarter, it projects total sales between $11.03 billion and $11.08 billion, which indicates 12-13% growth from the year-ago level. The company expects non-GAAP earnings per share in the band of $3.11-$3.13, while GAAP EPS is anticipated to be between $1.77 and $1.79. The cRPO growth is projected to be approximately 14% year over year.

For fiscal 2027, Salesforce expects revenues in the range of $45.80-$46.20 billion, up 10-11% year over year. Subscription and Support revenues are expected to increase slightly below 12%. The company anticipates fiscal 2027 non-GAAP earnings per share in the range of $13.11-$13.19.

Non-GAAP operating margin is projected to be 34.3%, while GAAP operating margin is expected to be 20.9%. Salesforce forecasts operating cash flow growth of 9-10% year over year. The company expects free cash flow growth to be in the range of 9-10% year over year. Capital expenditure is anticipated to be approximately 1.5% of total revenues.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 5.73% due to these changes.

VGM Scores

Currently, Salesforce has a average Growth Score of C, a score with the same score on the momentum front. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Salesforce has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Salesforce is part of the Zacks Internet - Software industry. Over the past month, Twilio (TWLO), a stock from the same industry, has gained 5.4%. The company reported its results for the quarter ended December 2025 more than a month ago.

Twilio reported revenues of $1.37 billion in the last reported quarter, representing a year-over-year change of +14.3%. EPS of $1.33 for the same period compares with $1.00 a year ago.

For the current quarter, Twilio is expected to post earnings of $1.26 per share, indicating a change of +10.5% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Twilio. Also, the stock has a VGM Score of C.

Just Released: Zacks Top 10 Stocks for 2026

Hurry – you can still get in early on our 10 top tickers for 2026. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful.

From inception in 2012 through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.

Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2026. You can still be among the first to see these just-released stocks with enormous potential.

See New Top 10 Stocks >>

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

Twilio Inc. (TWLO): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research