Jim Cramer on Salesforce: "Clearly, Management Believes the Stock's Gotten Way Too Cheap"

Salesforce, Inc. (NYSE:CRM) is one of the stocks Jim Cramer Recently Discussed. Cramer highlighted the company’s earnings and management commentary, as he stated:

Now, the Great Recession 2 will include the downfall of a ton of software companies that get their funding from private credit firms. The private equity and debt mongers love the steady flow of cash coming from those cloud software business models that are going to be obliterated. And of course, here you’re thinking about Salesforce, which reported tonight after the close, delivering, by the way, a robust top and bottom line beat, but their full-year earnings forecast came in a little light. I thought it was conservatively made, and that was enough to send that stock down in after-hours trading as if it fit the Citrini model of Monday.

On the other hand, though, they talked about spending $50 billion in buybacks, which is equal to more than a quarter of the share count. They’re sick and tired of the sell-off, and they’re not going to take it anymore. I don’t blame them. I saw a company called Workday report a really horrible number, opened down 12, and ended up finishing almost three bucks. And now Salesforce trades at 15 times earnings. Weird dichotomy…

I will tell you one thing: Salesforce just can’t seem to catch a break. The cloud software kingpin reported a better than expected quarter after the close, with its Agentforce business up 169% year over year annual recurring revenue growth. But their full-year revenue and non-adjusted earnings forecast were a tad light. So the stock’s getting slammed in after-hours trading. Wall Street’s just not willing to give these enterprise software companies the benefit of the doubt, as I said at the top of the show, even though they’ve come down huge from their highs and are now actually inexpensive on an earnings per share basis. Plus, Salesforce just announced a $50 billion buyback equal to more than a quarter of the company’s market capitalization. Clearly, management believes the stock’s gotten way too cheap.

Salesforce, Inc. (NYSE:CRM) provides CRM-focused tools that help businesses manage customer interactions, use AI agents, analyze data, collaborate, and run marketing, commerce, and field service operations.

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