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Investing.com - Bernstein raised its price target on Salesforce.com (NYSE:CRM) stock to $223.00 from $221.00 on Thursday, while maintaining an Underperform rating following the company’s latest quarterly results. The new target represents a 6.6% downside from Salesforce’s current trading price of $238.72, despite the company boasting a perfect Piotroski Score of 9, indicating strong financial health according to InvestingPro data.
The firm noted that Salesforce delivered an in-line quarter and guidance, excluding the impact from the Informatica acquisition. Despite growing AI and data revenue, Bernstein indicated the results did not resolve concerns about whether Salesforce will emerge as a winner or loser in the AI transformation. The company maintained its impressive 77.65% gross profit margins and posted 8.33% revenue growth over the last twelve months.
Bernstein characterized Salesforce as a mature business operating in a mature and competitive market, expressing that the company’s Agentforce offering remains in early adoption stages and is unlikely to drive near-term growth acceleration.
The modest price target increase resulted from Bernstein rolling forward its financial model, though this was partially offset by a reduction in the valuation multiple from 15.5x to 15x.
The firm maintained its cautious stance on Salesforce, citing "limited upside and meaningful downside risk," with large acquisitions remaining a concern for the cloud software provider.
In other recent news, Salesforce reported its fiscal third-quarter results, showing solid financial performance. The company achieved a revenue growth of 9%, or 8% in constant currency, which was largely in line with expectations. Earnings per share significantly exceeded guidance at $3.25. The current remaining performance obligation (cRPO) growth reached 11% in constant currency, surpassing estimates by approximately 200 basis points. Analysts have responded with mixed actions; Cantor Fitzgerald reaffirmed an Overweight rating with a $325 price target, while Evercore ISI lowered its price target to $340, maintaining an Outperform rating. Needham reiterated a Buy rating and highlighted better-than-expected results, particularly in the Agentforce product. Oppenheimer maintained an Outperform rating, noting robust growth in Salesforce’s artificial intelligence businesses. Meanwhile, Wolfe Research adjusted its price target to $300 from $310, still maintaining an Outperform rating. These developments reflect Salesforce’s ongoing efforts to enhance financial transparency and capitalize on growth opportunities.
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