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On Thursday, DA Davidson updated its stance on Salesforce.com (NYSE:CRM) shares, raising the price target to $225 from the previous $200, while maintaining an Underperform rating on the stock. The firm’s analysis followed Salesforce’s recent earnings report, which showcased better-than-anticipated results. Currently trading at $276.03 with a market capitalization of $264.8 billion, Salesforce maintains impressive gross profit margins of 77.19%. Despite the positive performance, DA Davidson noted concerns about the company’s future growth prospects. InvestingPro analysis reveals over 10 key insights about Salesforce’s performance and valuation metrics.
Salesforce’s financial results exceeded expectations, which has prompted a revision of the price target. The company’s revenue growth stands at 8.72% over the last twelve months, while maintaining a GOOD financial health score according to InvestingPro metrics. The company’s future outlook, however, has been adjusted to account for foreign exchange impacts and a modest first-quarter beat. DA Davidson highlighted that although growth in Salesforce’s core cloud segments is slowing, this is being partially offset by positive developments in the data cloud and artificial intelligence sectors.
The firm observed that Salesforce’s committed remaining performance obligations (cRPO) growth was one percentage point higher than anticipated. Nonetheless, the guidance for the second quarter was slightly below expectations. The outlook suggests that Salesforce may experience single-digit constant currency (CC) growth for the first time in its history.
DA Davidson’s revised price target of $225 is based on an 18.5 times multiple of the firm’s updated fiscal year 2027 earnings per share estimate. The Underperform rating suggests that the analysts at DA Davidson continue to have reservations about Salesforce’s stock performance relative to the market, despite the increase in the price target.
In other recent news, Salesforce’s financial performance has been a focal point for analysts, with several firms providing updates on their outlooks. Truist Securities maintained a Buy rating with a $400 price target, following Salesforce’s first-quarter results that exceeded expectations, particularly in subscription and support revenue. The company reported an 11% year-over-year growth in current remaining performance obligations (cRPO) on a constant currency basis. Wells Fargo (NYSE:WFC) analyst Michael Turrin adjusted the price target for Salesforce stock to $275, noting satisfactory first-quarter results and a positive unchanged guidance for fiscal year 2026.
Wolfe Research also expressed optimism, maintaining an Outperform rating and a $310 price target, citing Salesforce’s 11% growth in cRPO and strong performance in the small and medium-sized business sector. KeyBanc Capital Markets reiterated an Overweight rating with a $440 target, highlighting Salesforce’s strategic adjustments and a 16.3% increase in current bookings. Meanwhile, Baird analysts reduced their price target to $365 but maintained an Outperform rating, acknowledging Salesforce’s positive revenue and earnings per share results, as well as the potential of its Data Cloud and Agentforce ventures.
The company’s annual recurring revenue (ARR) from Data Cloud and Agentforce exceeded $1 billion, marking significant growth. Analysts have noted Salesforce’s strategic moves, including an $8 billion acquisition and a focus on AI and data management, as potential drivers for future growth. Overall, these developments reflect a varied but generally positive outlook from analysts regarding Salesforce’s financial health and strategic direction.
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