salesforce.com (CRM) PT Lowered to $300 at Wolfe Research

Wolfe Research analyst Alex Zukin lowered the price target on salesforce.com (NYSE: CRM) to $300.00 (from $310.00) while maintaining a Outperform rating.

The analyst comments "CRM delivered solid 3Q results with CC cRPO growth of 10.6%, an 1.7% beat (vs 90 bps in 2Q) while revenue was in line and grew 8% CC, implying CC cRPO bookings growth of 11% in the quarter. While the out performance benefited from M&A (Regrello) and early renewals the majority of the cRPO beat came form solid organic bookings execution driven by continued traction with Agentforce, Data, Slack, strong performance in SMB and mid-market, and enterprise acceleration, offset by weaker marketing and commerce and larger than expected cloud migrations at Tableau. AI continues to be the star of the show with Agentforce (AF) and Data 360 ARR reaching nearly $1.4 billion (+ 114% Y/Y) while AF itself surpassed $500M in ARR, AF production accounts increased 70% Q/ Q, and CRM now has 9,500+ AF paid deals, +50% Q/Q as well. Additionally, NNAOV growth exceeded AOV growth in the quarter (reach out if you want us to explain what these metrics actually are) while Q3 was one of the company's best quarters for pipeline generation which grew DD. Management narrowed the total revenue guidance range and raised subs. rev. growth guidance to 9% and slightly below 10% CC respectively. The guidance includes an ~80bp contribution from INFA, while the underlying organic subscription and support guidance was reiterated and now assumes that Tableau Cloud migrations continue. Q4 cRPO guidance came in at 13% and includes ~4 ppts from INFA and implies $~1.2B of INFA cRPO (inline with latest INFA's numbers) and ~$300M of INFA revenue (~20% haircut vs ~360M in our INFA model) in 4Q and organic Q4 subscription rev. growth and organic cc cRPO bookings growth of 9% and ~7% respectively. After sifting through the moving pieces the quarter was in-line with our expectations while the organic guidance feels conservative given the implied deceleration in Q4 bookings. We remain encouraged by AF momentum and look to FY27 guidance as the next material catalyst. Reiterate OP and PT to $300."

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