Salesforce Stock Trades Near 52-Week Low: Time to Buy, Sell or Hold?

Salesforce Inc. CRM has exhibited a consistent downtrend in recent months and currently trades near the 52-week low. At the closing price of $241.58 as of Oct. 9, the stock trades just 8.3% above the 52-week low of $226.48.

Year to date, Salesforce shares have plunged 26.6%, underperforming the Zacks Computer – Software industry’s gain of 21.6%. Moreover, Salesforce has been left behind by other major players in the enterprise software world, including Oracle Corporation ORCL, Microsoft Corporation MSFT and SAP SE SAP. Shares of Oracle, Microsoft and SAP have risen 78%, 23.8% and 12%, respectively, year to date.

Salesforce YTD Price Return Performance

The sharp contrast raises a tough question: Is it time to move on from Salesforce, or is there still long-term value in holding on? While near-term issues are weighing on the stock, there’s still a strong fundamental case for staying invested.

Why Salesforce Stock Is Underperforming

A decelerating growth trend has turned investors cautious about the company’s near-term prospects. For years, Salesforce delivered double-digit revenue increases. However, that pace has now cooled to single digits. In the first half of fiscal 2026, revenues rose just 8.7% year over year, and non-GAAP earnings per share (EPS) grew by only 9.4%.

This slowdown reflects cautious enterprise spending amid economic uncertainty and geopolitical pressures. Analysts anticipate that this trend will persist, with high single-digit revenue growth expected for fiscal 2026 and 2027.

The impact is also visible in profit forecasts. Salesforce’s EPS is now expected to witness a CAGR of 13.5% over the next five years, which is a big drop from the 27.8% CAGR it posted over the previous five years.

This changing growth profile shows how businesses are adjusting their IT budgets. Instead of large digital transformation projects, many are opting for smaller, lower-risk investments. For Salesforce, this means adapting its strategy to stay competitive and relevant.

Nonetheless, Salesforce still leads the global customer relationship management software market and holds the biggest market share, according to Gartner. This leadership position gives it a solid base to return to its robust growth trajectory.

Salesforce Dominates CRM Software Market

Salesforce remains the dominant player in the customer relationship management (CRM) software space. Its platform is deeply integrated across enterprise systems, making it a go-to solution for businesses.

Salesforce has expanded beyond just CRM through acquisitions like Slack, Informatica, Own Company and Zoomin. These deals reflect a long-term strategy to grow in areas like collaboration tools, cybersecurity and AI automation.

AI is central to Salesforce’s future. Its Einstein GPT product, launched in 2023, now powers generative AI features throughout the platform. These tools help users automate tasks, make better decisions and serve customers more efficiently.

Another long-term tailwind is rising global spending on generative AI. Gartner estimates that worldwide generative AI spending will hit $644 billion in 2025, implying a 76.4% year-over-year increase.

Enterprise software, a key segment for Salesforce, is expected to grow even faster, with a projected increase of 93.9% to $37.16 billion. Even if economic conditions slow down spending in the short term, digital transformation remains a top priority for businesses, ensuring steady demand for Salesforce’s solutions.

Salesforce’s Attractive Valuation

Salesforce shares are trading at a discounted valuation multiple compared to the industry. The stock currently trades at a forward 12-month price-to-earnings (P/E) multiple of 20.02, below the industry average of 33.54.

Salesforce Forward 12-Month P/E Ratio

Salesforce has a lower P/E ratio than other major enterprise software makers, including Microsoft, Oracle and SAP. At present, Oracle, SAP and Microsoft trade at P/E multiples of 39.66, 35.15 and 32.46, respectively.

Conclusion: Hold Salesforce Stock for Now

Salesforce’s slowing growth is real and has weighed on its stock price. However, its leadership in the CRM software space, focus on AI, strategic acquisitions and reasonable valuations provide reasons to hold the stock for long-term gains.

Salesforce carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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

Zacks Investment Research