Salesforce Faces Skepticism Ahead of Q2 Earnings Report
Salesforce is set to report its Q2 FY27 earnings on August 26 after the close, and investors are bracing for a classic 'beaten expectations but punished anyway' story.
The company has consecutively crushed EPS estimates by 5%, 25% over four quarters, yet shares sit at $190.97, down 28% YTD and nearly 30% off its 52-week high of $269.
At a forward P/E of 13.2x and a free cash flow yield of 9.4%, the market is pricing in stagnation, not the reacceleration management promises.
Citi's commentary paints a nuanced picture: Agentforce deployments are gaining traction, pricing/packaging changes are providing tailwinds, but customers are 'contentious around renewals', and little net-new customer demand is showing up in channel checks.
The stock has earned its skepticism: growth deceleration is real, net-new demand is missing, and the market has repeatedly sold the stock on beats.