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Investing.com - DA Davidson raised its price target on salesforce.com (NYSE:CRM) to $235.00 from $225.00 on Thursday, while maintaining a Neutral rating on the stock. The new target sits just below Salesforce’s current trading price of $238.72.
The price target adjustment follows Salesforce’s recent quarterly report, which showed lower-than-expected revenue but stronger-than-anticipated bottom-line performance that influenced the company’s fiscal year guidance. Despite the mixed results, InvestingPro data shows Salesforce maintains impressive gross profit margins of 77.65%.
DA Davidson noted that Salesforce reiterated its 8% constant currency subscription and support growth guidance for fiscal year 2026, while maintaining its non-GAAP operating margin target of 34.1%. This guidance aligns with the company’s recent revenue growth of 8.33% over the last twelve months.
The research firm acknowledged Salesforce management’s assertion that the company remains on track to reaccelerate revenue growth in 12 to 18 months, though DA Davidson expressed skepticism about this outlook given "rising competition for AI related IT budgets." This comes as Salesforce has seen its YTD price return decline by 28.25%.
The new $235 price target is based on 18 times DA Davidson’s updated fiscal year 2027 earnings per share estimate for the customer relationship management software provider. According to InvestingPro analysis, Salesforce appears undervalued with a current P/E ratio of 34.58 and a perfect Piotroski Score of 9, indicating strong financial health. For deeper insights into Salesforce’s valuation and over 30 additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Salesforce has reported its fiscal third-quarter results, which showed a 9% revenue growth, aligning with expectations. The company exceeded earnings per share guidance with a figure of $3.25 and demonstrated an 11% growth in constant currency remaining performance obligation, surpassing estimates by approximately 200 basis points. Needham reiterated a Buy rating with a $400 price target, highlighting the better-than-expected third-quarter results and stronger-than-anticipated fourth-quarter guidance. Oppenheimer maintained an Outperform rating, noting robust growth in Salesforce’s artificial intelligence businesses and the highest quarterly margin growth of the fiscal year.
Cantor Fitzgerald reaffirmed its Overweight rating and $325 price target, citing upside in contracted revenue pipeline, billings, and operating margin, despite cash flow from operations being slightly below expectations. Evercore ISI adjusted its price target to $340 from $360, maintaining an Outperform rating due to the solid growth outlook. Meanwhile, Bernstein raised its price target to $223, maintaining an Underperform rating, and expressed concerns about Salesforce’s position in the AI transformation despite growing AI and data revenue. These developments reflect a mixed but generally positive sentiment among analysts regarding Salesforce’s current performance and future prospects.
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