Salesforce (NYSE:CRM) is well-known as a premier provider of customer relations management software. There are reasons to like CRM stock in 2023, but it gets a “B” grade on overvaluation concerns.
Some investors might be concerned about insider share selling with Salesforce.
Salesforce’s products have an artificial intelligence connection that should entice some customers and shareholders. With that in mind, let’s delve into the risks and potential rewards that Salesforce’s investors need to consider now.
Wh0’s Been Selling CRM Stock?
Recently, we came across not just one, but three separate reports of insider selling at Salesforce.
First, Salesforce President and Chief Engineering Officer Srinivas Tallapragada sold 10,000 CRM stock shares recently. During the past year, Tallapragada has reportedly sold 177,532 Salesforce shares and has bought no shares of the company.
Next, Salesforce co-founder and Chief Technology Officer Parker Harris sold 1,250 shares. That’s probably not an enormous sum for Harris, but it’s still worth noting.
Salesforce CEO and Chair Mark Benioff recently sold 15,000 CRM stock shares. And here’s the kicker: Benioff has reportedly sold 1,373,825 shares of his company over the past year and not purchased any Salesforce shares during that time.
It’s difficult to determine exactly why these Salesforce insiders divested their shares. Do they know something that non-insiders don’t know?
Maybe, but it’s also possible that they merely booking profits. After all, CRM stock is up substantially this year, so far. And as the old saying goes, you’ll never lose money by taking profits.
Salesforce Was Firing, but Is Now Hiring
Some folks might find it off-putting that Salesforce’s chief executive sold so many of his company’s stock shares. Others may be concerned because Salesforce appears richly valued now, with a trailing 12-month price-to-earnings (P/E) ratio of 134x.
So, CRM stock isn’t necessarily a perfect investment. There are reasons to favor Salesforce in 2023. It’s a positive sign Salesforce has returned to hiring mode.
The company reduced its workforce by 10% in January. Now, however, Bloomberg states Salesforce is “hiring 3,300 people across departments.” The Bloomberg report calculates that the new hiring will “restore 40% of the headcount that was slashed in January.”
Another positive development is that Salesforce has launched a new conversational AI assistant called Einstein Copilot. This assistant will, according to the company, be “built into the user experience of every Salesforce application.”
Today’s businesses are often eager to deploy AI functionality into their applications. With Einstein Copilot, Salesforce is embedding AI-facilitated help into the company’s lineup of CRM software products.
CRM Stock May Be Worthwhile
Salesforce shares aren’t necessarily cheap by traditional metrics. Also, some financial traders may be worried about the Salesforce CEO’s large-scale share sales.
These concerns are understandable, but it’s encouraging to see Salesforce getting back into hiring mode and leveraging the power of conversational AI.
With all of that in mind, CRM stock earns a “B” grade and might deserve a place in your tech-stock holdings.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
