Incannex Healthcare stock tumbles after filing $100M offering
On Tuesday, Canaccord Genuity adjusted its price target for Salesforce.com (NYSE:CRM) shares, reducing it to $350 from the previous $400, while retaining a Buy rating on the stock. According to InvestingPro data, Salesforce currently trades at a P/E ratio of 43.1x and appears undervalued based on its Fair Value analysis. The revision followed Salesforce’s announcement of its intention to acquire Informatica, a significant move for the company.
Salesforce.com revealed plans for its third-largest acquisition to date, proposing to purchase Informatica at $25 per share in cash. This transaction values Informatica at roughly $8 billion in equity value, net of Salesforce’s existing investment. The purchase price represents a 30% premium over Informatica’s unaffected closing price from the previous Thursday. With a robust gross profit margin of 77.2% and strong revenue growth of 8.7% over the last twelve months, Salesforce demonstrates financial strength for such strategic moves.
The terms of the acquisition include a notable 63% of Informatica’s voting power already consenting to the deal, suggesting a high likelihood of completion without regulatory hurdles. Salesforce intends to finance the acquisition through a mix of available cash and new debt, with an estimated post-transaction net cash position of around $9 billion for Salesforce, factoring in share buybacks.
Salesforce has confirmed that the acquisition will not affect its ongoing capital return program. Moreover, the company’s management anticipates that the Informatica deal will contribute positively to non-GAAP operating margins, earnings per share (EPS), and free cash flow (FCF) starting in the second year after the transaction closes. This expectation is contingent upon achieving both cost synergies and revenue growth. The expected closure of the deal is in the early part of Salesforce’s fiscal year 2027.
In other recent news, Salesforce announced its intention to acquire Informatica for an equity value of $8 billion, a move that has significant implications for both companies. This acquisition is expected to enhance Salesforce’s data management capabilities, with analysts from DA Davidson noting potential advantages despite expressing reservations about Informatica’s technology. The deal is anticipated to close by FY27, with Salesforce planning to use cash reserves and new debt to fund the acquisition. Truist Securities views Informatica as a transformative asset for Salesforce, predicting it will boost the company’s artificial intelligence offerings and industry-specific services. Analysts have projected low double-digit subscription revenue growth for Informatica in the coming years, which could exceed Salesforce’s own forecasts.
Meanwhile, DA Davidson maintains a Neutral rating on Informatica, with a price target of $18, reflecting cautious optimism about the acquisition. Despite the acquisition news, DA Davidson’s stance on Salesforce remains Underperform, with a price target of $200, citing concerns about the integration challenges. UBS also revised its price target for Salesforce to $300, maintaining a Neutral rating due to potential risks associated with mergers and acquisitions. On a more positive note, Mizuho (NYSE:MFG) Securities reiterated an Outperform rating for Salesforce, with a price target of $380, despite recent challenges in a clinical program. Investors will closely monitor these developments as Salesforce progresses with its strategic expansion efforts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.