Key Stats for Salesforce Stock
- Price change for Salesforce stock in the last 6 months: 33%
- $CRM Stock Price as of Oct. 9: $229
- 52-Week High: $269
- $CRM Stock Price Target: $283
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What Happened?
BofA Securities upgraded Salesforce (CRM) to Buy from Underperform on Monday and raised its price target to $285 from $160.
The firm dropped its earlier worry that AI would push Salesforce aside. After talking with chief information officers, BofA said large companies are unlikely to replace platforms that hold their business logic, data, workflows, and compliance rules.
In its view, AI should make companies lean more on these platforms.
BofA asked two questions. Does Salesforce have a credible AI strategy? And can AI grow customer spending on the platform? It answered yes to both.
Cash flow also played a part, given Salesforce generated over $15 billion in levered free cash flow over the last twelve months.
That works out to an 8% free cash flow yield. BofA said this supports a slight valuation premium.
The new target uses 16 times calendar 2027 enterprise value to free cash flow. The old target used 9 times, while the peer average is higher at 15 times.
Other analysts are also positive.
- Yorkville Ives started coverage at Outperform with a $290 target.
- Oppenheimer kept Outperform with a $275 target.
- UBS raised its target to $260 but kept its rating Neutral.
- Citizens kept Market Outperform with a $315 target.
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What the Market Is Telling Us About Salesforce Stock
Salesforce stock has been under pressure as fears that AI would hurt software companies have grown. This upgrade takes the opposite view, and CRM stock now has a bull case built on trust and data, in addition to growth.
The latest results back that up.
- Q2 revenue was $11.35 billion, up 11%.
- Agentforce ARR hit $1.5 billion.
- Free cash flow was $1.1 billion, up 81%.
- The company raised its full-year revenue guidance by about $300 million.
Management also said net new AOV growth was the strongest in four years and attrition was near its lowest level ever.
Certain risks remain, as license revenue is still volatile. Management called a marketing recovery too early to call a trend. Analysts also disagree on how much upside is left.
For now, a shift in how Wall Street sees AI is driving Salesforce stock.
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So what is Salesforce stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
