Stock market today: Nasdaq closes above 23,000 for first time as tech rebounds
On Thursday, Oppenheimer maintained an Outperform rating on Salesforce.com (NYSE:CRM) but reduced the price target to $370 from $380, still representing significant upside from the current price of $276.03. According to InvestingPro data, analysts’ targets range from $225 to $442, reflecting mixed views on the stock’s potential. The adjustment follows the release of Salesforce’s first-quarter results, which surpassed consensus estimates and achieved a 200 basis points beat on the Current Remaining Performance Obligations (CRPO) growth guidance.
Salesforce reported strong management commentary regarding the uptake of its Agentforce and Data Cloud products and positive momentum in certain industries. The company maintains impressive gross profit margins of 77.19% and has achieved revenue growth of 8.72% over the last twelve months. Nonetheless, the company’s growth guidance for the second quarter CRPO was set slightly below consensus estimates, reflecting caution due to a challenging macroeconomic environment. This guidance continues the trend of high single-digit trailing twelve-month CRPO billings growth.
While growth under 10% might not be particularly exciting, it aligns with investor expectations and market multiples, according to Oppenheimer. The firm noted that the first-quarter CRPO outperformance, coupled with the second-quarter guidance, places Salesforce’s business modestly ahead of its previous guidance for the first half of fiscal year 2026, largely due to favorable foreign exchange tailwinds.
The reduced price target of $370 is attributed to a compression in group multiples, as explained by Oppenheimer’s analysis. Despite the lower price target, the Outperform rating suggests that Oppenheimer remains optimistic about Salesforce’s performance prospects.
In other recent news, Salesforce.com Inc. reported strong first-quarter financial results, surpassing analyst expectations. The company’s sales in the small to mid-sized customer segment were notably robust, with a 12.1% year-over-year increase in current remaining performance obligations, exceeding both company guidance and analyst projections. Salesforce’s Agentforce platform also showed significant growth, doubling its customer count to 8,000, contributing approximately $100 million in annual recurring revenue. Despite a slight decline in operating margins due to increased research and development costs, overall financial health remains strong.
Salesforce’s acquisition of Informatica is expected to enhance its data management capabilities, with analysts from Raymond (NSE:RYMD) James predicting the deal will be accretive to earnings a year after closure. Several analyst firms have adjusted their price targets for Salesforce, reflecting varied outlooks on the company’s future performance. Needham maintained a Buy rating with a $400 target, while DA Davidson raised its target to $225 but kept an Underperform rating. Wells Fargo (NYSE:WFC) increased its target to $275, maintaining an Equal Weight rating, and Wolfe Research reaffirmed its Outperform rating with a $310 target.
Analysts noted mixed momentum in Salesforce’s Data Cloud and Agentforce, with the Data Cloud’s annual recurring revenue exceeding $1 billion, growing at a rate of over 120% year-over-year. Despite some concerns about growth in core cloud segments, positive developments in data cloud and AI sectors offer potential offsets. Wolfe Research anticipates revenue growth of 8.6% and 8.9% for fiscal years 2026 and 2027, respectively, and expects Salesforce to exceed its free cash flow and earnings per share targets.
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