Quint Tatro on Salesforce: ‘this is a stock that I can’t get behind’

Shares of Salesforce.com Inc (NYSE: CRM) have climbed nearly 10% since it raised its full-year guidance for revenue on Thursday, but Joule Financial’s Quint Tatro says it’s a stock that “he can’t get behind”.

Tatro’s remarks on CNBC’s “Trading Nation”

Salesforce now forecasts $26.35 billion in revenue for fiscal 2022 versus its previous guidance for $26.3 billion that translates to a 1.0% increase, which, as per Tatro, does not justify a 6.0% gain in the stock on Thursday. On CNBC’s “Trading Nation”, he said:

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They spent $28 billion for Slack and estimated $6 billion in new revenue. So, some of that’s baked in. But at 60 times forward earnings, I would not advise chasing this name.

Tatro said traders were “poorly positioned” as he dubbed the price action on Thursday “a bit ridiculous”. He added:

They’re either covering or buying up in a frenzy.

For Tatro, higher multiples make the entire software space not attractive for investment at the moment.

Why Katie Stockton likes Blackberry

Fairlead Strategies’ Katie Stockton also expects DeMark Indicators to raise a sell signal on Salesforce “as early as tomorrow”.

Stockton likes Blackberry Ltd (NYSE: BB) over the competition in the software space. On “Trading Nation”, she said:

We do prefer the move in BlackBerry that has gapped up after a decline. When you see the gaps up following declines, they are more often than not breakaway gaps. It does have strong support, and this gap is more promising, in my opinion.

Blackberry shares are also up more than 5.0% this week after the Canadian company reported market-beating results for its fiscal second quarter on strength in its cybersecurity business.