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Salesforce, Inc. (CRM), headquartered in San Francisco, California, provides Customer Relationship Management technology that connects companies and customers. Valued at $241.40 billion by market cap, the company provides on-demand Customer Relationship Management (CRM) software for sales, marketing, customer service, analytics, and custom application development.
The leading cloud-based software company has underperformed the broader market over the past year. CRM has gained 17.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 18.2%. In 2024, shares of CRM are down 5.3%, while the SPX is up 11.5% on a YTD basis.
Narrowing the focus, CRM’s underperformance is also apparent compared to the S&P 500 Technology Sector SPDR (XLK). The exchange-traded fund has gained about 20.2% over the past year. Moreover, the ETF’s 6.4% gains on a YTD basis compare to the stock’s loss over the same time frame.
On May 30, CRM shares fell over 19% after the company reported its Q1 results. Its revenue of $9.13 billion fell short of the consensus estimates of $9.14 billion, but its adjusted EPS of $2.44 beat Wall Street expectations of $2.38. Its remaining performance obligations grew 10% year over year to $26.40 billion. The company expects Q2 sales between $9.20 billion and $9.25 billion, with the midpoint of $9.23 billion below analyst estimates of $9.34 billion. It expects non-GAAP EPS between $2.34 and $2.36.
For fiscal 2025, its revenue is expected between $37.7 billion and $38 billion, with non-GAAP EPS between $9.86 and $9.94. Meanwhile, CRM lowered its full-year 2025 Subscription & Support revenue growth guidance to slightly below 10% year over year.
For the current fiscal year, ending in Jan. 2025, analysts expect CRM’s EPS to grow 23.3% to $7.47 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 40 analysts covering CRM stock, the consensus rating is a “Moderate Buy.” That’s based on 26 “Strong Buy” ratings, two “Moderate Buys,” 11 “Holds,” and one “Strong Sell.”
This configuration is slightly more bullish than three months ago, with 25 suggesting a “Strong Buy.”
Recently, Piper Sandler’s analyst Brent Bracelin maintained a “Neutral” rating on CRM stock and a price target of $250, implying a marginal potential upside from current levels.
The mean price target of $293.27 represents a 17.7% premium to CRM’s current price levels. The Street-high price target of $350 suggests an ambitious upside potential of 40.5%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
