Salesforce Said To Be Planning $25B Bond Sale To Fund Buyback — And It’s Still Among The Least Leveraged In Software

• Oracle is the most leveraged among key enterprise software companies.
• Salesforce and Adobe have relatively low price-to-earnings ratios; CRM shares have declined 26% year-to-date.
• Stocktwits sentiment for CRM and key peers was ‘bearish.’ 

Salesforce is reportedly planning to raise up to $25 billion through bonds to fund its massive buyback plan, Bloomberg reported on Tuesday, citing sources. The reported move underscores the company’s urgency to buy back its stock quickly at depressed prices and puts fresh scrutiny on rising leverage across the tech sector, particularly at Oracle. 

Salesforce, whose shares have fallen about 26% year to date, is among the key software companies investors have sold off amid rising fears that general-purpose AI could reduce demand for niche enterprise software like the type Salesforce sells.

Still, some corners of the market believe the software selloff was overdone, with names like Salesforce now emerging as attractive at current valuations. The company last issued bonds in 2021, raising $8 billion to fund its acquisition of Slack.

The iShares Expanded Tech-Software Sector ETF (IGV), which tracks software companies, rose by more than 11% from its Feb. 23 record low, signaling that investors are returning to the sector.

Salesforce, Microsoft Among The Least Leveraged

The data shows Salesforce carries significantly lower balance sheet risk than Oracle, its most leveraged peer.

Sources: Fiscal.ai, Koyfin

Compared to peers, Oracle stands out for its much higher leverage, with a debt-to-equity ratio of 3.9 and a net debt-to-EBITDA ratio of 14.2, both far above those of other major enterprise software companies.

By contrast, Microsoft, ServiceNow, Adobe, and Salesforce maintain relatively conservative balance sheets, with low debt levels and in some cases net cash positions.

On valuation, Salesforce trades at roughly 14.8x forward earnings, cheaper than most large software peers. Microsoft, Oracle, and ServiceNow all command higher multiples, while only Adobe looks cheaper at 11.7x. These companies compete with Salesforce across CRM, marketing automation, enterprise workflows, and cloud platforms.

Retail View Dim On CRM, Peers

The valuation case hasn't won over retail traders yet. Last month, Salesforce guided its 2027 sales lower than what analysts had predicted, signaling that demand for business software remains under pressure. 

On Stocktwits, retail sentiment was ‘bearish’ for CRM, ADBE, and NOW, and ‘extremely bearish’ for MSFT. The sentiment for Oracle was ‘extremely bullish,’ after it reported a blowout quarter on Tuesday.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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