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Investing.com - KeyBanc has lowered its price target on salesforce.com (NYSE:CRM) to $400 from $440 while maintaining an Overweight rating on the stock. The software giant, currently trading at $256.45 with a market capitalization of $241.73 billion, is showing signs of being undervalued according to InvestingPro analysis.
The adjustment comes amid what KeyBanc describes as a persistently negative narrative surrounding the application software sector, which appears to be affecting Salesforce shares regardless of the company’s actual performance. Despite the market sentiment, Salesforce maintains impressive gross profit margins of 77.34% and has achieved revenue growth of 7.97% over the last twelve months. InvestingPro data reveals 8 additional key metrics and insights available for premium subscribers.
KeyBanc analyst Jackson Ader noted that "Stocks are not companies and companies are not sectors, but it feels to us like the shares of Salesforce are the linear embodiment of the application software sector."
The firm observed that throughout the recent earnings season, software companies faced downward pressure on their stocks regardless of their reported results, stating that "it almost didn’t matter what the results were, weakness was to follow."
Despite the price target reduction, KeyBanc’s maintained Overweight rating suggests the firm still sees upside potential for Salesforce stock, even as it acknowledges that "a point of constant currency outperformance in the quarter simply isn’t the answer" when investors are questioning terminal values.
In other recent news, Salesforce reported its Q2 2025 earnings, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $2.91, exceeding the forecasted $2.78. Revenue for the quarter reached $10.25 billion, slightly above the anticipated $10.14 billion. Additionally, Salesforce’s operating margin beat consensus estimates by 50 basis points. However, the free cash flow margin came in 180 basis points below expectations. Despite a 5% drop in after-hours trading, Goldman Sachs reaffirmed its Buy rating on Salesforce, maintaining a price target of $385.00. The firm expressed continued optimism about Salesforce’s prospects, particularly in the context of AI developments. These recent developments reflect key performance metrics and analyst perspectives on Salesforce.
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