On Friday, Deutsche Bank maintained a Buy rating on Salesforce.com (NYSE:CRM) with a $325.00 price target. The financial institution supports Salesforce's recent acquisition of the Own Company, a data protection and management solutions provider. The deal, valued at $1.9 billion in cash, takes into account Salesforce's pre-existing 10% stake in Own Company, bringing the total consideration to $2.1 billion.
Salesforce's strategic move to acquire Own Company is seen as a response to the growing need for data security, privacy, and compliance. Analysts believe that Salesforce can enhance Own Company's standing as a leading backup vendor for its applications, which is expected to boost Own Company's revenue growth in the future.
The acquisition is slated for completion in the fourth fiscal quarter and is not projected to have a significant impact on Salesforce's financial year 2025. However, it is anticipated to contribute approximately 60 basis points to subscription revenue growth in fiscal year 2026.
The deal is also expected to be accretive to Salesforce's free cash flow in the second year, hinting at a possible slight dilution in the first year. Importantly, the acquisition will not affect Salesforce's capital return program.
Deutsche Bank views the acquisition as consistent with Salesforce's historical approach to mergers and acquisitions, considering the scale, strategic fit, level of dilution, and capital allocation. The deal may have a slightly negative impact on other vendors in the data security and protection market, as it could restrict some of their growth opportunities within the Salesforce SaaS backup space. Current leaders in this market include Rubrik, Cohesity, and Commvault.
In other recent news, Salesforce announced its plan to acquire Own Company, a data protection and management solutions provider, for $1.9 billion. This acquisition is expected to enhance Salesforce's data security and compliance capabilities. The deal is set to close in the fourth quarter of Salesforce's fiscal year 2025.
In financial news, Salesforce reported robust second-quarter results with earnings per share of $2.56, surpassing both the consensus estimate of $2.36 and the previous year's $2.12 figure. This was accompanied by an 8% increase in sales, slightly exceeding expectations, driven by a 9% rise in subscription and support revenues.
Several financial firms including CFRA, TD Cowen, BMO Capital Markets, Canaccord Genuity, and Loop Capital have adjusted their price targets for Salesforce, reflecting confidence in the company's growth trajectory. Notably, CFRA maintained its Strong Buy rating.
Furthermore, Salesforce's CFO, Amy Weaver, has announced her plans to step down in early 2025, but she has committed to remaining on board to assist with the search for her successor. These are some of the recent developments investors should be aware of.
InvestingPro Insights
Real-time data from InvestingPro enriches the analysis of Salesforce.com's (NYSE:CRM) latest strategic acquisition with key financial metrics. The company boasts an impressive gross profit margin of 76.35% over the last twelve months as of Q2 2025, underscoring its efficient operations and strong pricing power. This financial health is further evidenced by Salesforce's operating income margin of 19.06% during the same period, indicating robust profitability that could support the integration of Own Company.
Two notable InvestingPro Tips for Salesforce include a perfect Piotroski Score of 9, suggesting the company is in top financial shape, and aggressive share buybacks by management, which may reflect confidence in the company's value. These actions, combined with the analysts' upward earnings revisions for the upcoming period, paint a picture of a company poised for growth. For readers interested in a deeper dive, there are 13 additional InvestingPro Tips available, which can be explored for a comprehensive understanding of Salesforce's financial outlook.
With a market capitalization of $235.14 billion and a forward P/E ratio of 39.05, Salesforce trades at a significant valuation, reflecting its position as a prominent player in the software industry. The acquisition of Own Company could potentially bolster Salesforce's already strong revenue growth, which stood at 10.26% in the last twelve months as of Q2 2025. This strategic move may well be in line with Salesforce's trajectory of enhancing its suite of services and maintaining its high return over the last decade. For investors and analysts alike, these insights offer a valuable perspective on Salesforce's market position and future potential.
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