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On Wednesday, Evercore ISI reiterated a positive outlook for Salesforce.com Inc (NYSE:CRM) shares, maintaining an Outperform rating and a $420.00 price target. With a market capitalization of $314 billion and a strong analyst consensus rating of 1.8 (Buy), Salesforce continues to attract institutional attention. According to InvestingPro data, the company maintains impressive gross profit margins of 77% and boasts a perfect Piotroski Score of 9, indicating exceptional financial strength. The firm’s analysts highlighted an anticipated solid performance for Salesforce’s fourth fiscal quarter, citing an uptick in demand and a "halo effect" from the company’s Agentforce product. They suggested that the risk/reward profile for investors with a 9-12 month view appears to be skewed to the positive side, with potential for the company to outperform current and street estimates for the calendar years 2025 and 2026 as Agentforce begins to significantly contribute to growth in the latter half of 2025.
Despite not expecting Agentforce to significantly influence the upcoming financial results, Evercore ISI noted that Salesforce’s branding around the product has been exemplary, positively affecting business activity as the company transitions from 2024 into 2025. The company’s solid financial foundation is evident in its $11.9 billion in levered free cash flow over the last twelve months. Want deeper insights? InvestingPro offers 10+ additional exclusive tips and comprehensive financial analysis for Salesforce. Analysts believe that it will take time for smaller proof of concepts (POCs) to evolve into larger deals and for the pricing model for Agentforce to be refined.
The firm anticipates that Salesforce’s first fiscal quarter guidance might be slightly below consensus, influenced by factors such as a new CFO and leap year headwinds. However, they argue that potential softness in the first quarter guidance is likely already anticipated by investors, and they would advocate purchasing on any weakness related to guidance. Evercore ISI’s stance is that Salesforce’s narrative for 2025 will revolve around revenues potentially reaching a low point in the first fiscal quarter and Agentforce demand beginning to positively affect bookings and committed remaining performance obligations (CRPO) in the second half of the year.
Concluding their commentary, Evercore ISI analysts expressed the belief that Salesforce’s stock is positioned to potentially "re-rate" higher throughout 2025 as demand for Agentforce builds, revenue potentially accelerates from the first half to the second half of the fiscal year, and operating margins continue to expand. They pointed out that at approximately 21 times the enterprise value to free cash flow (EV/FCF) for the calendar year 2026, the risk/reward balance continues to favor the upside for Salesforce stock. Based on InvestingPro’s Fair Value analysis, Salesforce appears to be trading near its fair value, with analyst targets ranging from $247 to $442. The company’s strong 9.5% revenue growth and robust financial health score of 2.97 (GOOD) suggest continued momentum.
In other recent news, Salesforce.com has been the subject of some noteworthy developments. BofA Securities maintained a positive outlook on Salesforce, reiterating a Buy rating and a $440.00 price target, citing potential for reacceleration in growth. This is based on an improved software spending environment and the growing impact of Salesforce’s new Agentforce cycle. Additionally, Salesforce announced plans to invest $500 million in Saudi Arabia, with the aim to foster innovation and economic growth in the region. This includes the introduction of Hyperforce, its next-generation platform architecture, in the country.
Salesforce also announced a significant executive team change, with Robin Washington set to become the company’s President and Chief Operating and Financial Officer starting March 21. In response to this, analysts from Needham reiterated a Buy rating and a $400.00 price target on Salesforce stock, expressing confidence in Washington’s qualifications for the dual role. These are among the recent developments that have been shaping the narrative around Salesforce.
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