Edward Jones, a financial services firm, maintained a Buy rating on Salesforce.com (NYSE:CRM), highlighting the company's strong position in the customer relationship management (CRM) software market.
The firm's analyst underscored Salesforce's potential to achieve above-average growth due to the expanding digital capabilities of companies across various industries.
Salesforce's comprehensive product suite is designed to cater to the needs of large corporate customers, which is expected to support favorable pricing and a reduced rate of customer churn.
The analyst from Edward Jones expressed confidence in Salesforce's experienced leadership team, which has a proven record of delivering consistent returns to shareholders.
In the view of Edward Jones, the software industry, where Salesforce operates, is poised to continue its trajectory of above-average growth. The industry trend, combined with Salesforce's market-leading position and product strategy, suggests that the company's shares are currently undervalued.
The analyst's statement reflects a positive outlook on Salesforce's future performance, anticipating that the company will leverage its expansive product offerings and market leadership to sustain growth.
According to recent financial reports, the company's fiscal 2025 second-quarter results showed a revenue increase to $9.33 billion, marking an 8% year-over-year growth. Their subscription and support revenue saw a 9% rise year-over-year.
Analysts from Evercore ISI, Goldman Sachs (NYSE:GS), and Stifel have all maintained a positive outlook on the company. Evercore ISI emphasized Salesforce's strong second-quarter performance and an impressive subscription revenue growth of 9.5%.
Goldman Sachs, which raised its price target to $325, highlighted Salesforce's consistent top-line guidance and its strategic position in AI development. Stifel also raised its price target from $300.00 to $320.00, indicating confidence in Salesforce's focus on AI solutions.
One of the company's focal points is its Agentforce platform, which is expected to enhance revenue through AI integration. Salesforce's AI development has led to the signing of 1,500 AI deals in the second fiscal quarter and a year-over-year paid customer growth of more than 130% in its Data Cloud segment.
The company is projecting a revenue range of $37.7 billion to $38 billion for fiscal 2025, anticipating an 8-9% year-over-year growth and a non-GAAP operating margin improvement of 230 basis points.
InvestingPro Insights
Recent data from InvestingPro enriches the analysis provided by Edward Jones, aligning with the positive sentiment towards Salesforce.com (NYSE:CRM). Salesforce boasts a robust market capitalization of $250.87 billion, underscoring its significant presence in the CRM software market. The company's impressive gross profit margin of 76.0% for the last twelve months as of Q1 2023 further validates Edward Jones's confidence in Salesforce's pricing power and customer retention capabilities.
InvestingPro Tips highlight Salesforce's perfect Piotroski Score of 9, which indicates strong financial health, and the company's ability to generate cash flows that can sufficiently cover interest payments, suggesting financial stability. Additionally, analysts predict that Salesforce will be profitable this year, which is consistent with the company's profitability over the last twelve months. These factors contribute to the view that Salesforce's shares may be undervalued, aligning with the growth potential identified by Edward Jones.
For investors seeking a deeper dive into Salesforce's metrics and additional strategic insights, InvestingPro offers a comprehensive list of 11 tips, available at https://www.investing.com/pro/CRM, which could further inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.