What happened

Shares of Salesforce (CRM 0.25%) were trading down about 2.5% at the market open on Thursday following a downgrade by Baird analyst Rob Oliver.

The analyst cited recent executive departures and a tough economic environment that could pressure sales in the near term. 

So what

With companies focusing more on doing more with less to save money, Salesforce has felt the impact on its business. Revenue growth has decelerated from over 25% at the end of last year to less than 15% on a reported basis in the most recent quarter. 

Oliver sees executive turnover at the company potentially leading to execution issues in the company, especially at a pivotal time when Salesforce is shifting its focus to improving profitability. Salesforce recently announced that its vice chairman and co-CEO would step down in January, meaning Marc Benioff will be chair and CEO of the company. To account for these risks, the analyst cut next year's revenue and earnings estimates.

Now what

What really counts right now is how much the stock's decline this year accounts for these obstacles. Investors have much lower growth expectations, considering the stock's forward price-to-earnings ratio has fallen from over 60 in 2021 to 26. 

Part of the reason for the discount is management's new priority to grow profits as opposed to maximizing sales. That could be signaling that Salesforce's high-growth days are over. On the other hand, it might simply be management taking a prudent course in light of the weakening economy.

Salesforce is serving a large addressable market, so it can still grow for a long time, but that will depend on when the economy is on more stable ground, which management doesn't see happening anytime soon. The stock's lower valuation could be a once-in-a-decade buying opportunity, but investors should be prepared for more volatility in the near term.