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On Friday, Stephens analyst Brett Huff adjusted the price target for Salesforce.com (NYSE:CRM) stock to $309 from the previous $311, while maintaining an Equal Weight rating. Huff’s remarks followed Salesforce’s recent earnings report, which he believes was better than the early Thursday market reaction suggested. According to InvestingPro data, 33 analysts have recently revised their earnings estimates upward for the upcoming period, with analyst targets ranging from $225 to $442.
The analyst expressed optimism regarding Salesforce’s initiatives, noting the company’s focus on integrating INFA features into its products swiftly and enhancing customer success and return on investment. This strategy includes the deployment of "forward-deployed" engineers and a revised compensation plan that emphasizes consumption and cross-selling.
Huff highlighted additional account executive hiring and the medium-term potential of Agentforce as positive developments for Salesforce. Despite the slight reduction in the price target, these factors suggest a constructive view of the company’s direction.
The new price target of $309 is based on a 7.0x enterprise value to FY2 revenue multiple, according to the analyst’s update. This adjustment reflects a nuanced view of Salesforce’s market positioning and future growth prospects as perceived by Stephens.
Salesforce, a prominent player in the cloud computing and customer relationship management sector, continues to evolve its offerings, aiming to leverage artificial intelligence as a catalyst for growth, an aspect that analysts like Huff are monitoring closely.
In other recent news, Salesforce has reported its first-quarter results for fiscal year 2026, revealing a Q1 operating margin of 32.3%, slightly below the expected 32.6%. Despite a favorable currency movement leading to a $400 million increase in as-reported revenue guidance, Salesforce maintained its FY26 guidance for a 34% margin. The company’s revenue grew by 8% year-over-year, surpassing consensus estimates by 1%, with a notable 12% growth in current remaining performance obligations (cRPO). Analysts from Morgan Stanley (NYSE:MS) and CFRA have reiterated their positive outlooks with price targets of $404 and $375, respectively, emphasizing Salesforce’s potential for revenue growth and margin improvement.
On the other hand, Citi revised its price target for Salesforce to $295, maintaining a Neutral rating, citing concerns over a deceleration in growth and a cautious outlook on profitability improvements. TD Cowen and FBN Securities have both maintained optimistic views with price targets of $375 and $360, respectively, highlighting Salesforce’s strong performance in data and AI capabilities, particularly with the Agentforce and Data Cloud products. Salesforce’s Data Cloud and AI annual recurring revenue showcased a robust year-over-year growth of 120%, indicating strong early adoption of Agentforce.
Salesforce’s strategy includes increasing its salesforce by 19%-22% by the end of the year, which some analysts believe could limit the upside potential for operating margin. Despite this, the company maintains its target for a 34% non-GAAP operating margin by fiscal year 2026. The focus on expanding sales capacity is seen as a positive indicator of demand and is expected to drive higher growth in the following year. Salesforce’s ongoing commitment to margin improvement and investment in growth opportunities like Agentforce and Data Cloud are central to its strategic outlook.
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