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Investing.com - Barclays has reiterated its Overweight rating on salesforce.com (NYSE:CRM) with a price target of $316.00. The stock, currently trading at $256.45 with a market cap of $245 billion, appears undervalued according to InvestingPro Fair Value calculations.
The research firm noted a disconnect in salesforce.com’s current investment case, highlighting that despite significant increases in sales capacity and the implementation of AI agents to improve sales efficiency, the company has not yet seen corresponding growth acceleration beyond its current 7.97% revenue growth rate. InvestingPro data shows impressive gross profit margins of 77.34%, indicating strong operational efficiency.
Barclays expects that higher growth will materialize in the future, but indicated that Q2 results and guidance came too early to provide visibility on this potential upswing, suggesting the stock will likely remain range-bound in the near term.
The firm pointed to the upcoming Dreamforce event as a potential catalyst that could provide more concrete examples of AI agent implementation and customer adoption, though it believes meaningful revenue acceleration will more likely occur next year when newly added sales personnel have fully ramped up.
Barclays maintained its positive long-term outlook on salesforce.com, citing the stock’s low valuation at 16x EV/FCF for calendar year 2026 estimates, while acknowledging it may not attract significant hedge fund interest in the short term.
In other recent news, Salesforce reported its Q2 2025 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $2.91 compared to the forecasted $2.78. The company’s revenue reached $10.25 billion, slightly exceeding the anticipated $10.14 billion. Despite these positive results, Bernstein analyst Mark Moerdler lowered Salesforce’s price target to $221 from $255, maintaining an Underperform rating due to the company’s soft guidance for the upcoming quarter. KeyBanc also adjusted its price target for Salesforce to $400 from $440, citing a negative sentiment in the application software sector impacting the stock. Meanwhile, Goldman Sachs reaffirmed its Buy rating and maintained a $385 price target, highlighting optimism around Salesforce’s AI initiatives. The company reported modest outperformance with revenue and current remaining performance obligation (cRPO) exceeding expectations by 1%, while operating margin beat consensus by 50 basis points. However, the free cash flow margin came in 180 basis points below consensus estimates, adding complexity to the financial outlook. These developments provide investors with a mixed view of Salesforce’s current financial health and future prospects.
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