Shares of Salesforce Inc
The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.
BofA Securities On Salesforce
Analyst Brad Sills maintained a Buy rating while raising the price target from $280 to $300.
Salesforce reported "very solid" third-quarter results, "with revenue and margin upside from strength in large deals (deals >$1 million + 80% y/y)," Sills wrote in a note.
"Backlog (cRPO) growth of +13% y/y cc well exceeded our +10% y/y with balanced strength across the core Sales and Service Clouds and continued improvement in Mulesoft and Tableau," the analyst stated.
The company's fourth-quarter backlog growth was "nicely above our 10% estimate, backed by healthy pipeline," he added.
Stifel On Salesforce
Analyst Parker Lane reiterated a Buy rating while lifting the price target from $275 to $300.
"Upmarket stabilization and the company's Data segment led to solid top-line results for CRM, while margin improvements continue to play out," Lane wrote in a note.
"Salesforce seems to be navigating well through the tougher macro, particularly upmarket, as the company called out an impressive 80% y/y growth in deals over $1 million," he added.
"We see a strong opportunity for continued Data Cloud, Mulesoft, and Einstein adoption as we expect enterprises to continue to adopt AI while MM and SMB customers remain in the evaluation stage of AI," the analyst further stated.
Goldman Sachs On Salesforce
Analyst Kash Rangan reaffirmed a Buy rating while raising the price target from $340 to $345.
Salesforce reported strong third-quarter results, accelerating subscription revenue growth to 13% year-on-year, "cRPO +14% yoy and non-GAAP OM of 31.2%," Rangan said. "Q3 validated our view that CRM can straddle OM expansion and re-acceleration," he added.
"Despite fears of high-single-digit growth, 4Q guide of 10% growth looks conservative in the context of strong renewals and a large customer win," the analyst further wrote.
Needham On Salesforce
Analyst Scott Berg maintained a Buy rating while lifting the price target from $250 to $275.
Salesforce reported its quarterly results ahead of expectations, "highlighted by top and bottom line beats but most impressive was the acceleration in cRPO growth to 14.4% YoY, well ahead of guidance and the highest since 2QF23," Berg said.
"Multi-cloud adoption trends continue to drive $1mm + deal flow with commentary suggesting demand trends are improving," the analyst stated." AI functionality and Data Cloud, which saw the fastest growth of any Cloud at 22.3% YoY, was the most interesting commentary to us as the company is seeing monetization in AI," he added.
RBC Capital Markets On Salesforce
Analyst Rishi Jaluria reiterated an Outperform rating while raising the price target from $240 to $285.
Salesforce delivered above-average cRPO upside, and "Q4 cRPO growth guidance was solid at 11% cc, likely easing concerns of FY25 revenue growth slipping into single-digit territory," Jaluria said.
"Supporting this, while macro headwinds persisted, management highlighted green shoots with large multi-cloud deals, strength in MuleSoft, and early success with new bundles and Data Cloud/EinsteinGPT," he added.
Oppenheimer On Salesforce
Analyst Brian Schwartz reaffirmed an Outperform rating while raising the price target from $250 to $275.
Salesforce's quarterly results exceeded consensus estimates, and "management gave strong commentary on the generative AI products adoption, and issued F4Q CRPO growth guidance that support the 11% consensus FY2025 subscription revenue growth estimate," Schwartz said.
The company raised its fiscal 2024 operating margin and cash flow guidance, which "supports Salesforce's EPS compounding growth story and multiples," he added.
Piper Sandler On Salesforce
Analyst Brent Bracelin maintained a Neutral rating while raising the price target from $232 to $266.
Salesforce "has not seen any data that would suggest the external demand environment is improving," Bracelin wrote in a note.
"That said, the sales reorganization earlier this year and tighter internal controls have helped spark improved execution throughout the year culminating in cRPO growth upside to 13% and a slight $5M top-line beat," he added.
"The margin expansion narrative took a breather this quarter with operating margin coming in at 31.2%, down slightly from 31.6% last quarter but still up meaningfully y/y," the analyst stated.
Morgan Stanley On Salesforce
Analyst Keith Weiss reiterated an Equal Weight rating while lifting the price target from $278 to $290.
"With a Q3 beat across top- & bottom-line metrics, much better-than-feared Q4 cRPO guidance, and a window into further margin expansion in FY25, Salesforce hit back on three major bear points weighing on the shares," Weiss wrote.
"Outstanding questions going forward center on positioning for GenAI into FY25," he added.
DA Davidson On Salesforce
Analyst Gil Luria reaffirmed a Neutral rating while raising the price target from $200 to $230.
The third-quarter results were "positive" as Salesforce "continues to execute with 30%+ Non-GAAP operating margins and position the company to capture growing demand for Salesforce's expanding data and AI capabilities," Luria said.
"While we like the company's pricing power and durable competitive positioning, we remain on the sidelines given a lack of top-line catalysts and the current valuation," he added.
BM0 Capital Markets On Salesforce
Analyst Keith Bachman maintained an Outperform rating while lifting the price target from $252 to $277.
Salesforce reported strong results against "fairly low expectations," Bachman said. "Further, the CRPO guide is about 1 point higher than we suggested in our preview," he added.
"We think Data Cloud is gaining traction with customers being in six of the top ten deals this quarter," the analyst wrote.
Mizuho Securities On Salesforce
Analyst Gregg Moskowitz reiterated a Buy rating while raising the price target from $255 to $280.
"While we had anticipated a little cRPO upside this quarter, constant currency cRPO growth of 13% Y/Y was well above mgmt's guidance that called for growth to slightly exceed 11% Y/Y," Moskowitz wrote in a note.
"CRM also observed greater multi-cloud traction, and noted early success with AI-related offerings," he added.
Roth Capital Partners On Salesforce
Analyst Richard Baldry reaffirmed a Buy rating and price target of $265.
This was the second consecutive quarter of sequential growth, Baldry said. "Slowed enterprise spending remains a headwind, with revenue growth still far below its prior long-term 20% target," he added.
"We now view the rapid emergence of generative AI technologies, and CRM's ability to already support the technology across most of its offerings, as a potential near-term revenue accelerator to perhaps insulate CRM from recessionary risks," the analyst further stated.
Evercore ISI On Salesforce
Analyst Kirk Materne maintained an Outperform rating and price target of $290.
Salesforce generated strong quarterly results, with "another significant bottom line beat and CRPO growth of ~14% vs. expectations of ~11%," Materne said.
"Management remains upbeat regarding the Gen AI opportunity and highlighted the momentum that the broader Data Cloud is seeing as organizations recognize the need to modernize their data architecture in order to enable new AI applications," the analyst stated.
"We expect Gen AI (and the pricing uplift) to have a more modest impact on revenue growth in the immediate near-term, with a bigger potential lift later in 2024," he further wrote.
CRM Price Action: Shares of Salesforce have risen by 8.37% to $249.63 at the time of publication Thursday.
