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On Thursday, Raymond (NSE:RYMD) James analyst Brian Peterson adjusted the price target for Salesforce.com (NYSE:CRM) shares, bringing it down to $375 from the previous $425, while reaffirming a Strong Buy rating on the stock. Peterson’s stance remains positive despite acknowledging mixed signals in the company’s fourth-quarter results. With a current market capitalization of $294 billion and impressive gross profit margins of 77%, Salesforce maintains its position as a dominant force in the software industry. According to InvestingPro, the company boasts a perfect Piotroski Score of 9, indicating exceptional financial strength.
Salesforce’s fourth-quarter performance provided ammunition for both supporters and critics, as the company reported robust bookings and promising adoption of its Agentforce platform. However, this was counterbalanced by a growth outlook for fiscal year 2026 that fell short of expectations. Peterson highlighted Salesforce’s impressive 120% growth in Data Cloud and Artificial Intelligence Annual Recurring Revenue (ARR), which he views as significant given its scale. The company’s revenue growth stands at 9.53%, with InvestingPro analysis suggesting the stock is currently trading below its Fair Value, presenting a potential opportunity for investors seeking exposure to the AI-driven software sector.
Peterson expressed optimism about Salesforce’s potential for continued growth, noting that the company’s consistent low-double digit growth in current remaining performance obligations (cRPO) could lead to surpassing initial high-single digit guidance, alongside improving profit margins. Management’s comments on stabilization in the U.S. market and steady sales hiring plans were seen as positive indicators of the demand environment.
The analyst emphasized Salesforce’s market leadership, evidence of successful AI implementations, and a history of returning capital to shareholders. Despite the downward adjustment in the price target, Peterson encouraged investors to look beyond minor fluctuations in growth, considering the company’s strong secular tailwinds.
In other recent news, Salesforce.com has been the focus of various analyst evaluations following its recent earnings announcements. The company reported fourth-quarter results that aligned with revenue expectations and exceeded earnings per share (EPS) estimates, with EPS of $2.78 surpassing the projected $2.61. However, Salesforce’s revenue of $9.99 billion fell short of the consensus projection of $10.04 billion, marking its second revenue miss in nineteen years. Despite these mixed results, Evercore ISI maintained an Outperform rating with a $420 price target, citing potential revenue acceleration later in the fiscal year. Meanwhile, DA Davidson cut its price target to $275, noting a projected slowdown in revenue growth for fiscal year 2026.
Goldman Sachs remains optimistic, maintaining a $400 price target and highlighting Salesforce’s potential growth from its Data Cloud and Agentforce initiatives. Stifel also adjusted its price target to $375 from $425 but retained a Buy rating, emphasizing Salesforce’s strong position in agentic AI and potential for margin expansion. JMP Securities revised its target to $430, acknowledging Salesforce’s better-than-expected EPS but noting the revenue shortfall. These developments reflect a range of analyst perspectives on Salesforce’s financial performance and strategic initiatives.
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