Salesforce is falling into a 'growth purgatory' and it may have some trouble clawing its way out, according to Bernstein.
Salesforce is falling into a "growth purgatory," and it may have some trouble clawing its way out, according to Bernstein. Analyst Mark Moerdler downgraded the software giant to underperform from market perform, saying that shares look overpriced given the company's lower margins and quality earnings when compared to peers.
"With the tailwinds from M & A no longer enough, core markets approaching cloud saturation, competition increasing, and macro issues hitting growth, management is aggressively pivoting to driving margins," he said. "But the cuts are going to negatively impact efficiency, growth, and customer/employee satisfaction." Going forward, Moerdler also expects these margin improvements to take time to play out, and will likely to come in much lower than consensus expectations.
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