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On Monday, Citizens JMP analyst Patrick Walravens maintained a bullish outlook for Salesforce.com (NYSE:CRM), reiterating a Market Outperform rating and a steady price target of $450.00. According to InvestingPro data, Salesforce boasts impressive fundamentals, including a perfect Piotroski Score of 9 and robust gross profit margins of 77%, suggesting strong operational efficiency. Walravens highlighted a mix of positive and negative factors influencing the software giant, including a significant $170 million contract awarded by the Department of the Treasury on January 31, which stands as Salesforce’s second-largest federal award to date.
Walravens’ analysis drew from a collection of 12 data points, out of which 9 were positive. Notably, Salesforce’s product Agentforce was mentioned as performing exceptionally well, potentially doubling initial expectations. This success was attributed to the product’s budget being allocated from business budgets rather than IT budgets, suggesting a more flexible return on investment.
Further optimism was expressed by a partner who suggested that Salesforce has potential for further growth, especially since the service area is a prime market for agentic AI, and Salesforce possesses a wealth of data to leverage in this field.
However, the analysis was not without its concerns. Walravens noted some negative sentiment regarding Salesforce’s Mulesoft and the Data Cloud, although specific details of these concerns were not elaborated upon. Despite these issues, the overall stance of Citizens JMP on Salesforce remains positive, with the substantial federal contract and the promising performance of Agentforce contributing to the favorable rating and price target. InvestingPro analysis indicates that Salesforce is currently trading below its Fair Value, with 12 additional ProTips available to subscribers, offering deeper insights into the company’s valuation and growth prospects.
In other recent news, Salesforce has been actively engaged in strategic developments and financial performance reviews. The company is in talks for a potential billion-dollar cloud agreement with major providers like Google (NASDAQ:GOOGL), Oracle (NYSE:ORCL), and Microsoft (NASDAQ:MSFT), aiming to enhance its computing resources for AI product expansion. Salesforce’s upcoming fourth-quarter earnings report is highly anticipated, with analysts like TD Cowen’s Derrick Wood maintaining a Buy rating and a price target of $400, citing strong growth execution and positive trends in product adoption. Meanwhile, BMO Capital has adjusted its price target for Salesforce to $375, maintaining an Outperform rating but expressing cautious optimism about the near-term impact of the company’s new product, Agentforce, on financial guidance.
Stifel analysts also maintain a Buy rating with a $425 price target, emphasizing the growing interest in Salesforce’s Agentforce product, which is expected to drive revenue growth as it gains broader adoption. The company’s increased focus on research and development, along with go-to-market strategies, is expected to bolster Agentforce’s integration within its customer base. Additionally, Salesforce Ventures participated in a $305 million funding round for Together AI, highlighting Salesforce’s involvement in the AI sector. These developments collectively indicate Salesforce’s strategic direction and its ongoing efforts to expand its market presence and product offerings.
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