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On Thursday, BMO Capital Markets reaffirmed its confidence in Salesforce.com Inc. (NYSE:CRM), maintaining an Outperform rating and a $350.00 price target on the stock. The firm’s analyst, Keith Bachman, provided insights into the company’s recent performance, acknowledging that while the results were not exceptional, they were satisfactory given the modest expectations. According to InvestingPro data, Salesforce maintains impressive gross profit margins of 77.19% and demonstrates good financial health with strong cash flow generation. Salesforce’s constant currency (CC) calculated remaining performance obligation (CRPO) growth of 11% was noted to have surpassed both BMO’s and the consensus estimates on Wall Street, bolstered by strong renewal activity and robust free cash flow (FCF) generation.
The analyst pointed out that Salesforce’s guidance for subscription revenue and free cash flow for fiscal year 2026 remains unchanged, leading to no significant adjustments in BMO’s forecasts for FY26 or FY27. With revenue growth of 8.72% over the last twelve months and an EPS forecast of $11.41 for FY2026, the company continues to show steady expansion. Despite the steady guidance, Bachman mentioned that Salesforce’s Data Cloud and Agentforce are progressing, albeit not yet significantly contributing to the company’s growth. He emphasized that the potential impact of Salesforce’s artificial intelligence (AI) on overall growth is still in the early stages, suggesting that investors may need to exercise patience to see this technology fully contribute to the company’s performance.
Salesforce’s recent quarter’s achievements are noteworthy in the context of the ongoing economic uncertainty that has affected many technology companies. The firm’s ability to generate solid free cash flow and exceed growth expectations in a challenging environment could be seen as indicative of its resilience and the effectiveness of its business model.
The analyst’s reiteration of the Outperform rating and price target reflects a continued positive outlook on Salesforce’s stock, despite the need for time to realize the full benefits of emerging technologies like AI within the company’s suite of services. InvestingPro analysis suggests the stock is currently undervalued, with 8 additional exclusive ProTips available for subscribers. Salesforce shares may attract attention from investors who align with BMO Capital Markets’ perspective on the company’s steady performance and future potential. For a comprehensive analysis of Salesforce’s valuation and growth prospects, investors can access the detailed Pro Research Report, available exclusively on InvestingPro.
In other recent news, Salesforce.com Inc. reported a robust first-quarter financial performance, surpassing expectations, particularly in sales within the small to mid-sized customer segment. The company’s current remaining performance obligations (cRPO) expanded by 12.1% year-over-year, outperforming its own guidance and analyst projections. Despite this, some analysts have adjusted their price targets for Salesforce. Needham maintained a $400 price target with a Buy rating, reflecting confidence in the company’s growth trajectory. Oppenheimer also retained an Outperform rating but reduced its price target to $370 due to a compression in group multiples.
Additionally, Piper Sandler raised its price target for Salesforce to $335, maintaining an Overweight rating, citing the company’s strategic acquisitions and financial performance as positive indicators. Meanwhile, Northland adjusted its price target to $396, retaining an Outperform rating despite concerns over the recent acquisition of Informatica. Bernstein SocGen Group increased its price target to $255 but maintained an Underperform rating, noting challenges such as competition in the AI sector and limited potential for price appreciation. These developments highlight the varied perspectives among analysts regarding Salesforce’s future performance.
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