Salesforce shares fell as much as 3% after the company reported fiscal first-quarter earnings on Thursday.
Analyst Yun Kim of Rosenblatt initiated coverage of Salesforce with a sell rating on May 4, noting that some sales executives could follow Block out the door and that, after spending about $25 billion on acquisitions in the past two years, the company could face backlash if it were to make more big deals. Additionally Kim’s industry checks in January, before governments started directing people to stay home to avoid coronavirus, suggested that the pace of big companies deploying business applications could slow down this year.
“We believe that when the enterprise IT spending environment returns, the pace of large-scale business application deployments is likely to lag other initiatives with higher priority,” Kim wrote. “Our most recent checks indicate that many of these SFDC initiatives have been pushed out indefinitely or have been downsized significantly.”