On Tuesday, Citi reaffirmed its Neutral rating for Salesforce (NYSE:CRM) with a steady price target of $323.00. The evaluation follows recent observations from Salesforce's annual Connections event in Chicago, which is centered on marketing and commerce.
The firm noted positive demand for Salesforce's Data Cloud, which was a major focus at the Connections event. The Data Cloud's prominence and the company's successful multi-cloud bundling strategy were highlighted as optimistic indicators.
However, Citi is looking for stronger evidence that these factors can counterbalance the trend of market share loss, where Salesforce's mid-single-digit growth contrasts with competitors HubSpot (NYSE:HUBS) and Braze, who are experiencing growth in the 20-30% range.
Citi's stance remains cautious due to a balance of factors. The company's valuation is considered undemanding, yet there are concerns about potentially slower growth in the fiscal year 2025. Additionally, Salesforce's high reliance on seat-based revenue is seen as a potential risk factor.
The current market conditions and Salesforce's strategic moves are being closely monitored to assess any changes in the company's growth trajectory and market position.
InvestingPro Insights
As Salesforce (NYSE:CRM) continues to navigate the competitive landscape of cloud-based solutions, real-time data from InvestingPro provides a more granular look at the company's financial health and market performance. With a market capitalization of $261.02 billion and a robust gross profit margin of 75.5% over the last twelve months as of Q4 2024, Salesforce demonstrates significant profitability in its operations.
InvestingPro data also highlights a noteworthy revenue growth of 11.18% during the same period, indicating the company's ability to expand its sales amidst a competitive environment. Despite trading at a high earnings multiple with a P/E ratio of 49.83, the company's stock has shown low price volatility, which may appeal to investors seeking stability in their portfolio.
Among the InvestingPro Tips, it's mentioned that Salesforce has a perfect Piotroski Score of 9, suggesting strong financial health, and analysts predict the company will be profitable this year. These insights could provide reassurance to investors concerned about Salesforce's growth, especially when considering the company's strategic initiatives like their multi-cloud bundling strategy and the focus on the Data Cloud as observed at the recent Connections event.
For those looking to delve deeper into Salesforce's financial metrics and strategic positioning, InvestingPro offers additional tips, including the company's moderate level of debt and high return over the last decade. To gain full access to these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/CRM.
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