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On Thursday, TD Cowen analysts maintained a positive outlook on Salesforce.com (NYSE:CRM) shares, reiterating a Buy rating and a price target of $375.00. The firm’s assessment followed Salesforce’s fourth-quarter results, which showcased an 11% constant currency growth in current remaining performance obligations (cRPO), approximately 1.5% above the company’s guidance. This performance marked a slightly stronger beat compared to the third quarter, albeit with a higher benefit from early renewals. With a market capitalization of $282 billion and impressive gross margins of 77%, Salesforce continues to demonstrate robust financial health. InvestingPro analysis reveals the company has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength.
For the first quarter, Salesforce’s cRPO guidance was slightly ahead of expectations. However, the forecast for subscription growth by fiscal year 2026 at around 9% constant currency was marginally below TD Cowen’s estimate of approximately 9.5%. Despite this, the strength of Salesforce’s Data Cloud and plans to ramp up sales hiring were highlighted as strong indicators of enduring demand for the company’s offerings. According to InvestingPro analysis, Salesforce appears undervalued at current levels, with analysts setting targets as high as $442 per share.
TD Cowen analysts suggested that the guidance provided by Salesforce may include an element of extra caution due to the recent transition of the Chief Financial Officer (CFO). The firm’s stance on Salesforce remains unchanged, with the price target set at $375, signaling confidence in the company’s market position and future prospects.
Salesforce’s financial health, as indicated by the reported figures and the analysts’ interpretation, appears to remain robust. The company’s strategic focus on expanding its sales force and the solid performance of its Data Cloud service are expected to continue driving growth. Despite the conservative guidance amidst executive changes, the analyst firm’s reasserted Buy rating reflects a belief in Salesforce’s capacity to maintain its trajectory in the market.
In other recent news, Salesforce has reported mixed developments that have captured the attention of investors and analysts alike. The company’s recent earnings report showed a robust fourth-quarter performance, with better-than-expected margins and cash flow, despite foreign exchange challenges. Notably, Salesforce’s Data Cloud and AI annual recurring revenue surged by 120% year-over-year. However, the revenue outlook for fiscal year 2026 was more conservative than expected, partly due to legacy product underperformance.
In terms of analyst reactions, BMO Capital Markets adjusted its price target for Salesforce from $375 to $367, maintaining an Outperform rating. Truist Securities kept a Buy rating with a $400 price target, citing the company’s solid Q4 results. Piper Sandler also lowered its price target to $400, maintaining an Overweight rating, while Scotiabank (TSX:BNS) cut its target from $440 to $400, retaining a Sector Outperform rating. KeyBanc Capital Markets maintained an Overweight rating with a $440 target, despite mixed performance metrics.
Salesforce’s Agentforce product has gained significant traction, securing 3,000 new deals, including high-value transactions. While the company’s guidance for subscription revenue growth in fiscal year 2026 met some expectations, it fell short of consensus estimates. Analysts from firms like Piper Sandler and Scotiabank remain optimistic about the potential for AI monetization and the growth of Agentforce, though they acknowledge the challenges posed by longer sales cycles in core cloud services. These developments highlight Salesforce’s ongoing efforts to capitalize on emerging opportunities while navigating existing challenges.
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