Derrick Wood, an analyst from TD Cowen, maintained the Buy rating on Salesforce (CRM – Research Report). The associated price target was lowered to $375.00.
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Derrick Wood has given his Buy rating due to a combination of factors that highlight Salesforce’s potential for growth and strong market position. The company’s reported fourth-quarter subscription revenue growth exceeded expectations, and the current remaining performance obligation (cRPO) growth was also above guidance, indicating robust demand. Additionally, Salesforce’s Data Cloud and AI business is experiencing significant growth, with an annual recurring revenue of $900 million and a year-over-year increase of 120%, which underscores the company’s strength in these areas.
Derrick Wood also notes that Salesforce plans to increase sales hiring by 10-20%, supported by strong demand indicators, which suggests confidence in future growth. The company’s platform and integration segments, including Mulesoft and Slack, have shown growth acceleration, and the upcoming release of Tableau Next is expected to further boost performance. Despite some conservative guidance due to a CFO transition, the overall outlook for Salesforce remains positive, with potential for upward revisions in estimates as the company continues to capitalize on its strengths in Data Cloud and AI.
Wood covers the Technology sector, focusing on stocks such as Salesforce, ServiceNow, and Microsoft. According to TipRanks, Wood has an average return of 16.8% and a 63.84% success rate on recommended stocks.
In another report released today, Morgan Stanley also maintained a Buy rating on the stock with a $405.00 price target.