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On Wednesday, Wedbush Securities reaffirmed its Outperform rating and a $425.00 price target for Salesforce (NYSE:CRM), following the company’s announcement of its first-quarter financial results for fiscal year 2026. Salesforce reported revenue of $9.83 billion, marking an 8% year-over-year increase and surpassing analysts’ expectations of $9.75 billion. According to InvestingPro data, the company maintains impressive gross profit margins of 77.19% and has demonstrated strong financial health with a robust Piotroski Score of 8. The company also noted a rise in its Remaining Performance Obligations (RPO) to $60.90 million, a 13% year-over-year growth, with the current RPO at $29.6 million, up 12% year-over-year in constant currency (CC). InvestingPro analysis reveals that Salesforce operates with a moderate level of debt, maintaining a healthy debt-to-equity ratio of 0.2, while generating substantial levered free cash flow of $12.4 billion over the last twelve months.
Salesforce closed 8,000 Agentforce deals during the quarter, which is a significant increase from the 5,000 deals in the previous quarter. Notably, half of these new deals were paid contracts, showing a growing investment in Salesforce’s core technology suite. The Data Cloud and AI Annual Recurring Revenue (ARR) have now reached a $1 billion run rate, up 120% year-over-year, with approximately 60% of the top 100 deals including Data Cloud and AI components.
In addition to the strong quarterly performance, Salesforce has raised its full-year 2026 guidance. The company now expects total revenue to be between $41.00 billion and $41.30 billion, which is above the earlier market estimate of $40.82 billion. The forecast for non-GAAP operating margin remains in line with expectations at around 34.0%, while free cash flow growth is projected to be between 9.0% and 10.0%. For deeper insights into Salesforce’s valuation and growth potential, InvestingPro subscribers can access comprehensive analysis, including 8 additional ProTips and detailed financial metrics in the Pro Research Report, which provides actionable intelligence for smarter investing decisions.
The acceleration of the Agentforce strategy is seen as a key driver for Salesforce’s growth, particularly as the company begins to monetize its AI capabilities. Wedbush analysts believe that Salesforce is strategically scaling its AI initiatives over the next 12 to 18 months, positioning itself to capitalize on the ongoing AI revolution in the software industry. The analysts estimate that AI-driven revenue could potentially add approximately $80 per share to Salesforce’s valuation as the company continues to develop and monetize AI use cases in the enterprise sector.
In other recent news, Salesforce has been in the spotlight with its announcement to acquire Informatica for approximately $8 billion in equity value. This acquisition is expected to enhance Salesforce’s Data Cloud platform, with analysts from Morgan Stanley (NYSE:MS) noting the favorable terms of the deal, which are seen as accretive to Salesforce’s operating margins, earnings per share, and free cash flow by FY28. Loop Capital also views the acquisition as a strategic fit, emphasizing its potential to boost Salesforce’s margins and cash flow. Meanwhile, Evercore ISI maintains an Outperform rating on Salesforce, highlighting the company’s strong start to the fiscal year and the impressive growth of its Data Cloud and Agentforce products. The firm noted that Salesforce’s combined Annual Recurring Revenue for these products has surpassed $1 billion, with a growth rate exceeding 120% year-over-year. Canaccord Genuity adjusted its price target for Salesforce to $350 while retaining a Buy rating, reflecting confidence in the company’s strategic moves. Truist Securities, on the other hand, downgraded Informatica to Hold, acknowledging the acquisition’s benefits for Informatica shareholders amidst its business model transition. Salesforce’s management anticipates that the Informatica acquisition will positively impact its financial performance, supported by expected cost synergies and revenue growth.
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