Needham maintains Salesforce stock Buy rating with $400 target

On Monday, Needham reaffirmed its Buy rating on Salesforce.com (NYSE:CRM) shares with a steady price target of $400.00, well above the current trading price of $325.83. According to InvestingPro data, analyst consensus remains strongly bullish with targets ranging from $247 to $442, reflecting the market’s confidence in this prominent software industry player. Following discussions with a top-tier Salesforce partner primarily engaged with Revenue Cloud in European markets, the firm’s confidence in Salesforce’s growth prospects has been bolstered. The partner indicated that demand is on the rise as concerns over macro-driven spending begin to subside, and they may need to double their workforce to keep up with the increasing demand. This optimism is supported by Salesforce’s impressive financial metrics, including a 76.94% gross profit margin and 9.53% revenue growth in the last twelve months.

Salesforce’s Revenue Cloud is demonstrating strong applicability in the high-tech sector, and there’s potential for expansion into the manufacturing sector with the enhanced Revenue Cloud Advanced offering. The partner’s first implementation of Agentforce, although starting at a pilot level, suggests a robust need for Salesforce’s services if it’s rolled out on a larger scale. An 8-10 line quota for Agentforce implementations points to a significant requirement for Salesforce’s offerings.

The insights from the partner also highlighted the split between greenfield opportunities and replacement projects, revealing a considerable chance for Salesforce to acquire new logos. The improved and scalable solutions provided by Revenue Cloud Advanced are poised to meet the needs of a diverse range of clients.

Despite the initial pilot nature of the Agentforce implementation, the demand for this service is growing. The partner’s consideration of a substantial increase in headcount to meet demand underscores the strength of the market’s need for Salesforce’s services.

In summary, Needham’s reiteration of its Buy rating on Salesforce stock reflects a positive outlook on the company’s future, driven by strong demand trends in Europe, the versatility of Revenue Cloud, and the potential growth from new customer acquisition. The $400.00 price target remains unchanged, signaling confidence in Salesforce’s market position and its ability to capitalize on these opportunities. With a perfect Piotroski Score of 9 and strong financial health metrics, InvestingPro analysis suggests the stock is currently slightly undervalued. For deeper insights into Salesforce’s valuation and 13 additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Salesforce has announced the appointment of Robin Washington as the new President and Chief Operating and Financial Officer (COFO), a role she will assume from March 21, 2025. This move coincides with the retirement of Brian Millham, who will transition into an advisory role on May 1, 2025. Analysts from Evercore ISI, Barclays (LON:BARC), Truist Securities, and Needham have provided mixed reactions to these changes, with Needham maintaining a Buy rating and a $400.00 price target on Salesforce.

Furthermore, Piper Sandler also confirmed a positive outlook on Salesforce, maintaining an Overweight rating and a $405.00 price target. This follows recent investor meetings in Europe with Salesforce executives Alexandra Chan and Valmik Desai. The introduction of Agentforce, Salesforce’s digital labor platform, was highlighted as a key factor in reinvigorating customer engagement.

These developments come as Salesforce continues to innovate and grow in the AI and digital labor space. The company’s focus on integrating AI with its Customer 360 applications, Data Cloud, and Einstein AI aims to redefine the workforce by merging human and digital agents on a unified platform. These are the latest updates in Salesforce’s ongoing evolution and strategic direction.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.