On Wednesday, Evercore ISI increased the price target for Salesforce.com (NYSE:CRM) to $420 from the previous $400, while maintaining an Outperform rating on the stock. According to InvestingPro data, Salesforce currently trades at $331.43, with analyst targets ranging from $236 to $450.
The company maintains impressive gross profit margins of 76.35% and boasts a perfect Piotroski Score of 9, indicating strong financial health. The firm's decision follows Salesforce's third fiscal quarter performance, which showed a revenue growth of 8% in constant currency, slightly surpassing the 7% anticipated by both Evercore ISI and the broader market.
InvestingPro analysis reveals the company's strong momentum, with a remarkable 41.56% price return over the past six months and a market capitalization of $316.85 billion. Subscribers can access 14 additional ProTips and comprehensive financial metrics through the Pro Research Report. Earnings per share (EPS) for the quarter were reported at $2.41, aligning with expectations, despite being affected by a negative $0.18 from losses on strategic investments.
Salesforce's current remaining performance obligation (CRPO) growth was another highlight, with a 10% increase in constant currency, outperforming the Street's forecast of approximately 9%. The forecast for the fourth fiscal quarter CRPO growth stands at about 9%, which aligns with expectations but includes a roughly $100 million foreign exchange headwind.
Adjusted for this, the CRPO growth rate is approximately 9.5%, which is seen as slightly better than expected and could indicate a potential acceleration point if Salesforce continues to outperform as it has in previous quarters.
The upbeat commentary from the company's management on Agentforce, a new AI initiative, was noted as a positive sign. Although Agentforce's contribution to the current guidance is not significant, it has already secured 200 deals in the first week of general availability in the quarter. Salesforce's management has expressed strong enthusiasm for the Data Cloud and Agentforce, considering them key opportunities for future growth.
CEO Marc Benioff highlighted the company's hiring of an additional 1,000 to 2,000 salespeople, attributing the expansion to the vast potential of Agentforce and improved sales productivity from existing representatives since the internal transformation began over a year ago.
The analyst firm pointed out that the strong performance in the recent quarter was driven by robust bookings activity, which in part stems from a stabilization in the transactional business over the last few quarters.
InvestingPro's financial health assessment rates Salesforce as "GREAT" with particularly strong scores in growth (3.95/5) and profitability (3.56/5), supporting the company's positive trajectory into 2025. This stabilization is particularly noticeable in the create and close business as well as in the small and medium-sized business (SMB) segment.
This sustained momentum, along with the strategic focus on emerging technologies like Agentforce, supports the firm's positive outlook on Salesforce's growth trajectory leading into Calendar Year 2025 and beyond.
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