San Francisco-based Salesforce, Inc. (CRM), with a market capitalization of $307.8 billion, is a premier provider of Customer Relationship Management (CRM) technology, designed to strengthen connections between companies and their customers. The company delivers a comprehensive suite of on-demand CRM solutions spanning sales, marketing, customer service, analytics, and custom application development.
Shares of CRM have outperformed the broader market over the past year. CRM has gained 52.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.8%. However, in 2024, CRM shares are up 22.4%, while SPX shares are up 25.7% on a YTD basis.
Narrowing the focus, CRM has outperformed the SPDR S&P Software & Services ETF (XSW). The exchange-traded fund has gained about 45.6% over the past year. But the stock lags behind the 22.9% gains of the ETF on a YTD basis.
Despite surpassing the broader market over the past year, CRM shares dropped 2% and remained in red for the week after announcing results for its second quarter of fiscal 2025 on August 28. Salesforce posted revenues of $9.3 billion, marking an 8.4% year-over-year increase and aligning with analysts' expectations.
For the current fiscal year, ending in January 2025, analysts expect CRM’s EPS to grow 24.6% to $7.55 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 43 analysts covering CRM stock, the consensus rating is a “Strong Buy.” That’s based on 30 “Strong Buy” ratings, three “Moderate Buys,” nine “Holds,” and one “Strong Sell.”
This configuration is slightly more bullish than two months ago, with 28 suggesting a “Strong Buy.”
On Oct. 28, Stifel Financial Corp. (SF) raised its price target for CRM from $320 to $350, maintaining a “Buy” rating. While acknowledging uncertainties around Salesforce’s agent-based AI potential, Stifel chose to hold off on model updates until gaining insights from the company, early users, and partners. However, the firm estimates that Salesforce’s Agentforce Service Agent alone could represent a multi-billion-dollar opportunity and suggests that the company’s current valuation may undervalue the sustained revenue growth potential of this new model.
While CRM currently trades above the mean price target of $316.05, the Street-high price target of $400 suggests an upside potential of 24.2% from the prevailing market prices.
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On the date of publication, Kritika Sarmah 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.
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