Trading Salesforce's 25% Surge Post Earnings Report
The recent stock market sell-off has caused many billion-dollar technology companies to unwind their pandemic-led gains.
While the threat of higher interest rates continues to affect growth markets such as tech stocks, there are still some companies posting strong fundamental data.
Cloud-based software company Salesforce recently announced an earnings report which surprised the market causing the stock to jump nearly 8% on the news but still down around 39% from its record high.
Learn more about Salesforce stock (CRM) and how to trade it below.
|Symbol for Invest.MT5 Account:||CRM|
|Date of Idea:||7 June 2022|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Why Trade Salesforce Stock?
Salesforce is an American cloud-based software company that provides one of the world’s most used customer relationship management platforms. Some of Salesforce’s well-known clients include Walmart. The company is global with most of its clients coming from the United States and the United Kingdom.
At the end of May, Salesforce reported first-quarter results that beat analyst expectations while also lifting its full-year guidance for earnings. The company posted revenues of $7.41 billion against an expected $7.38 billion and earnings of 98 cents per share against an expected 94 cents per share.
With revenues up 24% year over year and a successful $2.7 billion acquisition of Slack, many analysts are bullish on the long-term prospects for Salesforce’s stock price, as discussed further below.
Interestingly, while many other companies bemoan worldwide economic conditions, Salesforce co-founder and co-CEO Marc Benioff, said “We’re just not seeing material impact on the broader economic world that all of you are in.”
However, this does not mean to say the company’s performance will continue to perform in the midst of a global economic slowdown. Some of its clients may start to slow down or cut expenses. This is one of the reasons why Salesforce has slowed down its hiring process.
This also led to Salesforce lowering its revenue guidance for 2023 but boosting its profit expectations.
Salesforce Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Salesforce stock forecast in the past 3 months, there are currently 29 buy, 4 hold and 0 sell ratings on the stock. The highest price level for a Salesforce stock forecast is $332.00 with the lowest price target at $175.00.
The average price target for a Salesforce stock forecast is $241.03 which represents more than 31% upside from current levels, at the time of writing.
Source: TipRanks, 7 June 2022
An Example Trading Idea for the Salesforce Stock Price
An example trading idea for the Salesforce stock forecast could be as follows:
- Buy the stock on a break above $191.00 to allow for current market volatility.
- Target just below the average analyst price target at $241.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Salesforce shares:
- If target is reached = $500.00 potential profit ($241.00 - $191.00 *10 shares).
It’s wise to remember that the share price is unlikely to go up in a straight line and it may even go much further down before it rises, especially considering the recent sell-off in global stock markets.
Therefore, be sure to exercise good risk management which is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade and the risks involved.
Another factor to consider is the commission as these can eat into your profits. With the Admirals Invest.MT5 account you can buy US stocks from $0.02 per share. This means buying 10 shares in Salesforce stock would result in a commission of $0.20 ($0.02 * 10 shares).
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Salesforce Stock in 4 Steps
With Admirals, you can buy shares in companies like Salesforce with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for Salesforce at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance.
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Do You See the Salesforce Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Salesforce's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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