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On Friday, TD Cowen analysts maintained their Buy rating on Salesforce.com (NYSE:CRM) shares, with a steadfast price target of $375.00. The firm’s analysis suggests a complex landscape, yet they express optimism particularly about the company’s performance in Data and Artificial Intelligence. With a "GREAT" financial health rating according to InvestingPro analysis, Salesforce maintains impressive gross profit margins of 77%. The company is scheduled to report its first-quarter earnings on May 28.
The analysts’ commentary highlighted mixed signals in the market, with strong demand for data solutions and promising early adoption of Salesforce’s Agentforce. While they noted some areas of concern, particularly on the commercial side, the company has maintained solid revenue growth of 8.7% over the last twelve months. Despite these challenges, the overall outlook from TD Cowen remains positive.
The report anticipates a more modest increase in calculated Remaining Performance Obligations (cRPO) compared to the previous quarter. The analysts expect Salesforce to provide guidance for the fiscal year 2026 that aligns with current expectations. Agentforce, a newer offering from Salesforce, is showing good adoption rates, although it is still considered early days for this product to significantly impact financial results.
The firm’s reiteration of the Buy rating indicates their belief in the ongoing value and potential of Salesforce as an investment. TD Cowen’s analysts conclude that while Salesforce is experiencing some unevenness in its business segments, the strengths in its Data and AI Cloud offerings are reasons for continued endorsement of the stock.
In other recent news, Salesforce has introduced a new flexible pricing model for its Agentforce platform, aiming to facilitate scalable AI adoption. This model includes the ’Flex (NASDAQ:FLEX) Credits’ system, allowing businesses to purchase credits for AI actions, and the ’Flex Agreement,’ which provides investment flexibility between user licenses and digital labor. Meanwhile, Proof Mark, a partner and shareholder, has raised governance concerns, questioning Salesforce’s board’s fiduciary responsibility after receiving no response to their notices. The firm has made these concerns public through a Substack microsite.
Regarding analyst activity, Needham has maintained its Buy rating for Salesforce, citing confidence in the company’s strategic direction and AI innovations. Conversely, DA Davidson downgraded Salesforce to ’Underperform,’ expressing concerns about the company’s focus on AI over its core business. Guggenheim upgraded Salesforce from Sell to Neutral, noting that the stock’s decline aligns with its future prospects but highlighting ongoing challenges with the Agentforce product. These developments reflect varying perspectives on Salesforce’s strategic moves and their potential impact on the company’s growth trajectory.
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