Goldman Sachs Reiterates Buy Rating on salesforce.com (CRM)

Goldman Sachs analyst Kash Rangan reiterated a Buy rating and $345.00 price target on salesforce.com (NYSE: CRM)

The analyst comments "We reiterate our Buy rating and 12-month PT of $345 ahead of Salesforce’s F1Q25 earnings, expected on 5/29. Heading into the print, we expect revenue +11% yoy, cRPO +10% yoy, non-GAAP operating margins of 32% (in-line with expectations), and non-GAAP EPS of $2.29 (vs consensus of $2.24). We feel comfortable with these estimates (largely in-line with guidance) as we note that management’s outlook was predicated on strong execution and less on an improvement in the economic backdrop or a recovery in SMB spending. While results from C1Q companies suggest the softness in these metrics have persisted qoq, we also remind investors that 1Q is a seasonally less-significant quarter, unlikely to alter the company's path toward +10% subscription revenue growth in FY25. Similar to F3Q24, we believe investor focus will be indexed toward the possibility of disruptive M&A and the shape of CY24 topline growth. However, management has indicated unwavering discipline as it pertains to the financial impact of future deals, with any potential deal likely to be accretive to both growth and margins fairly quickly. After the company’s TrailblazerDX conference, we also expect demand for Data Cloud to remain strong, with pipeline likely built at the event. We left with greater conviction in Salesforce’s ability to execute against its product road map and enhance its products via AI. We continue to believe the stock offers a good balance of growth, margin expansion, and capital return that can generate $15-16 FCF/share in FY27."

For an analyst ratings summary and ratings history on salesforce.com click here. For more ratings news on salesforce.com click here.

Shares of salesforce.com closed at $285.61 yesterday.

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