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. “Salesforce’s growth is slowing and mgmt is implementing large force and cost reductions as they scramble to drive margin improvement,” he wrote in a Wednesday note to clients. “These cuts will take time to flow through and we expect will further exacerbate growth deceleration. Much of the savings are necessary to offset slowing growth, and therefore, the big lift to margins is unlikely to occur.” According to Moerdler, Salesforce’s growth has been on a deceleration path for years, with a slew of acquisitions helping shield the downward cycle. “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. Given this backdrop, Moerdler trimmed the firm’s price target to $119 from $134, suggesting shares are due to fall 19% from Tuesday’s close. Salesforce’s stock plummeted in 2022, falling nearly 48% as growth names took a hit in an environment defined by rising interest rates and recession fears. Like its technology peers looking to cut costs after hitting expansion mode, Salesforce announced plans this month to cut 10% of its workforce , or more than 7,000 employees. Shares dipped more than 2% before the bell. — CNBC’s Michael Bloom contributed reporting