TD Cowen maintains Salesforce stock Buy rating, $375 target

On Thursday, TD Cowen reaffirmed its Buy rating and $375.00 price target for Salesforce.com (NYSE:CRM), following the company’s solid first-quarter performance. According to InvestingPro data, the stock currently trades below its Fair Value, with analyst targets ranging from $225 to $442. Derrick Wood, an analyst at TD Cowen, highlighted the company’s revenue and committed remaining performance obligations (cRPO) growth, which slightly exceeded estimates by 1%. Salesforce maintained its full-year constant currency subscription revenue growth guidance at approximately 9%, despite foreign exchange considerations impacting reported estimates.

Salesforce’s Data Cloud and artificial intelligence (AI) annual recurring revenue (ARR) showcased a robust year-over-year growth of 120%, indicating strong early adoption of Agentforce. With an impressive gross profit margin of 77.19% and revenue growth of 8.72% over the last twelve months, the company’s financial performance remains strong. Wood pointed out that Salesforce’s renewed emphasis on accelerating sales capacity growth is a positive indicator of demand and is expected to drive higher growth in the following year.

The analyst’s commentary underscores the company’s steady macroeconomic environment and bullish demand signals, particularly in data and Agentforce. InvestingPro analysis reveals several positive indicators, including the company’s prominent position in the Software (ETR:SOWGn) industry and its operation with moderate debt levels. These factors, along with Salesforce’s consistent performance and strategic focus on growth initiatives, appear to support the firm’s optimistic outlook and the reaffirmed price target. Discover 8 more exclusive InvestingPro Tips and comprehensive analysis in the Pro Research Report.

Salesforce.com, a leader in customer relationship management (CRM) solutions and commanding a market capitalization of $249.2 billion, continues to evolve its offerings with a focus on data and AI capabilities, which are becoming increasingly important in the CRM industry. The company’s ability to maintain its growth guidance in the face of currency fluctuations also demonstrates its resilience in a dynamic market.

Investors and stakeholders in Salesforce.com can take note of TD Cowen’s reiterated stance, as it reflects the ongoing confidence in the company’s strategy and market position. The $375 price target remains a benchmark for the company’s expected performance and valuation in the eyes of the firm.

In other recent news, Salesforce reported an 8% year-over-year revenue increase for the first fiscal quarter, surpassing consensus estimates. The company also achieved a 12% growth in its current remaining performance obligation (cRPO) and an 11% rise in billings, both exceeding market expectations. Salesforce’s non-GAAP earnings per share (EPS) were $2.58, slightly above the consensus. Looking forward, Salesforce provided guidance for its second fiscal quarter that is above market expectations, with anticipated cRPO growth around 10% year-over-year.

Salesforce’s acquisition of Informatica was a notable development, with analysts expressing varied opinions on its impact. While Northland analysts reduced their price target to $396, they maintained an Outperform rating, citing strong potential for revenue growth despite concerns over the acquisition. Piper Sandler raised its price target to $335, reflecting a positive outlook on Salesforce’s strategic acquisitions and financial performance. Meanwhile, Bernstein increased its price target to $255, maintaining an Underperform rating due to concerns over Salesforce’s market maturity and competition.

Analysts from FBN Securities and BMO Capital maintained their Outperform ratings, with price targets of $360 and $350, respectively, pointing to strong free cash flow and growth in specific cloud segments. Despite varied analyst opinions, Salesforce’s strategic moves and financial results continue to be a focal point for investors.

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