Should you buy Salesforce stock on post earnings weakness?

Salesforce.com Inc (NYSE: CRM) reported market-beating results for its fiscal second quarter on Wednesday. Shares still tanked after the bell on trimmed guidance.

Is Salesforce stock a ‘buy’?

Including the after-hours price action, Salesforce stock is now down roughly 35% year-to-date, which, as per Jason Snipe (Founder of Odyssey Capital Advisors), is a dip worth buying. On CNBC’s “Closing Bell: Overtime”, he said:

His outlook is in line with Wall Street that sees a 40% upside in the Salesforce stock on average.

Salesforce lowered its outlook likely on macro headwinds including a strong dollar and a looming recession that could hit IT spend.

It now forecasts $4.71 to $4.73 of adjusted EPS on $31 billion in sales this year. Salesforce also came in shy of estimates for the current quarter, even though “Dreamforce” – its annual conference that contributes rather pompously to revenue is scheduled for September.

Also on Wednesday, the board authorised a stock buyback programme worth up to $10 billion, as per the earnings press release.

Salesforce Q2 earnings snapshot

Net income of $68 million was down from last year’s $535 million
Per-share earnings tanked from 56 cents to 7 cents only
Adjusted EPS printed at $1.19, as per the earnings press release
Revenue went up 22% year-over-year to $7.72 billion
Consensus was $1.03 of adjusted EPS on $7.69 billion in revenue
Subscription and support sales jumped 21%, slightly below estimates
Professional services brought in $577 million, beating expectations

Salesforce attributed the year-on-year hit to profit to the cost of revenue that climbed 32% and pushed total operating expenses up to $5.40 billion versus $4.40 billion in the same quarter last year.