TLDR
- Salesforce stock hit a 52-week low at $216.67, down 33.65% over the past year
- The U.S. Army awarded Salesforce a $5.6 billion, 10-year contract through subsidiary Computable Insights
- Stock is trading below all key moving averages and near oversold territory with RSI at 35.79
- Technical indicators show bearish pressure with a death cross occurring in April 2024
- Key support level sits at $222.00 with resistance at $267.50
Salesforce Inc shares touched a 52-week low of $216.67 on Wednesday. The stock gave up earlier gains despite announcing a major government contract.
The company secured a $5.6 billion, 10-year Indefinite Delivery Indefinite Quantity contract with the U.S. Army. Computable Insights LLC, a wholly owned Salesforce subsidiary focused on national security, will execute the deal.
The agreement allows the Army and Department of War to use Salesforce’s cloud tools for faster decision-making and streamlined operations. The contract will support millions of service members, civilian employees, industrial partners and military families.
The contract aims to help the Army scale innovation rapidly. It promises to cut procurement timelines from months to days while offering predictable pricing and simplified contracting processes.
Despite this contract win, Salesforce stock has dropped 33.65% over the past 12 months. The decline reflects ongoing challenges including increased competition and market volatility.
Technical Picture Shows Weakness
The stock is currently positioned below all its key moving averages. It trades approximately 8.4% below its 20-day SMA, 8.3% below its 50-day SMA and 11.1% below its 200-day SMA.
The RSI sits at 35.79, approaching oversold territory. This suggests the stock is experiencing downward pressure but could see a rebound if conditions worsen further.
The MACD indicator remains below its signal line. This signals bearish pressure and suggests momentum isn’t favoring buyers right now.
Key support stands at $222.00, while resistance is set at $267.50. A breach below support could trigger further declines. A move above resistance might signal a potential trend reversal.
Recent Developments and Financial Health
A death cross occurred in April when the 50-day SMA crossed below the 200-day SMA. This technical pattern typically signals a longer-term downtrend.
The company maintains gross profit margins of 77.73% and carries a “GOOD” overall financial health rating. Management has been aggressively buying back shares.
Salesforce recently issued 139,574 restricted stock units to employees from its acquisitions of Apromore, Spindle AI and Informatica. This move is part of the company’s 2014 Inducement Equity Incentive Plan.
Several analysts remain positive on the stock. Citizens reiterated a Market Outperform rating, highlighting the strong performance of Agentforce business, which has reached over $500 million in Annual Recurring Revenue.
KeyBanc maintained an Overweight rating, citing opportunities in the Life Sciences Cloud market as competition with Veeva intensifies. Wolfe Research reaffirmed an Outperform rating due to growing AI integration in Salesforce’s offerings.
The stock declined 34.69% over the last 12 months. This long-term trend reflects the challenges the company faces in regaining upward momentum.
Salesforce currently trades near its 52-week low of $218.96. This position raises concerns about further declines if selling pressure continues.
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