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Salesforce - AI Stock Analysis

Analysis generated December 4, 2024

Salesforce is a global leader in Customer Relationship Management (CRM) software. The company provides a comprehensive suite of applications centered around sales, customer service, marketing automation, analytics, and application development. Salesforce operates primarily on a subscription-based model, which offers them recurring revenue streams.

Fundamental Analysis

Salesforce reported a revenue of $9.33 billion for the last quarter, demonstrating a quarter-over-quarter growth of 1.46% and a year-over-year increase of 7.95%. This is a healthy sign of continuous revenue expansion.

However, the net income for the last quarter was $1.43 billion, which is a 6.78% decline compared to the previous quarter. Year-over-year growth in net income was more encouraging at 12.79%, indicating that, despite a quarterly setback, the company’s profitability has improved over the past year.

EBITDA for the last quarter was $2.69 billion, reflecting a quarter-over-quarter growth of 3.94% and a year-over-year growth of 13.69%. This indicates a healthy operational performance and efficient management of operating expenses.

The current P/E ratio stands at 57.77, signaling a high valuation, perhaps overstretched, which could pose a bearish outlook. Additionally, insider selling in recent months may indicate a lack of confidence among company executives, another bearish indicator.

Technical Analysis

Today’s stock price is $367.87, showing a robust increase of 23.44% compared to a month ago and 47.21% compared to a year ago. This indicates a strong bullish trend in both short-term and long-term price movements.

The current Simple Moving Average over 10 days (SMA10) is $336.23, better than the previous SMA10 of $333.65, underscoring a potential upward trend in stock price.

However, the Relative Strength Index (RSI) is at 87.2, suggesting an overbought condition which could be a bearish signal, indicating the stock might be due for a correction soon.

Alternative Data Analysis

Salesforce is looking to expand, evidenced by the 912 job openings listed recently, up by 39% over the last couple of months. This points to an underlying growth strategy.

Website traffic has been steady at approximately 117 million visitors, neither increasing nor decreasing meaningfully in recent months. Mobile app downloads stand at 2,300 per day, up by 6% in the past few months, indicating a healthy uptick in customer engagement.

While Salesforce has significant social media followings with 250,000 Instagram followers and 590,000 Twitter followers, there hasn’t been noticeable growth or decline in these numbers. Lastly, AltIndex's AI score for Salesforce is 54, which corresponds to a 'hold' recommendation.

Conclusion and Recommendation

Salesforce shows promising signs in terms of revenue growth, EBITDA, and long-term stock trends. However, a decline in net income compared to the previous quarter and high P/E ratio pose some risks. Insider selling further adds to these concerns.

The technical indicators suggest a bullish trend, though the RSI figure indicates the stock might be overbought. The alternative data presents a mixed picture with strong job growth and app downloads, but stagnant web traffic and social media engagement.

Considering all these factors, Salesforce appears to be fundamentally strong but with cautionary signals suggesting potential volatility or correction. Therefore, the recommendation stands at a 'hold' as per AltIndex's AI score.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.