Salesforce Delivers Upside 'Across The Board': 5 Analysts React To Strong Q2 Performance

Shares of Salesforce Inc CRM spiked in early trading on Thursday, after the company reported better-than-expected quarterly results and issued strong guidance.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

BMO Capital Markets On Salesforce

Analyst Keith Bachman maintained an Outperform rating, while raising the price target from $255 to $262.

Salesforce delivered a strong quarter, with revenue upside and a healthy margin performance, Bachman said in a note. “Moreover, we believe the 10% y/y CC CRPO guide hit the bar for investors as good enough alongside continued margin expansion,” he wrote.

Margin expansion and free cash flow growth are likely to continue, and the company’s growth “should be helped by AI solutions and pricing as well over the next few years,” the analyst added.

Stifel On Salesforce

Analyst Parker Lane reiterated a Buy rating, while lifting the price target from $250 to $275.

Salesforce’s delivered upside “across the board” in the fiscal second quarter and raised its full-year guidance, Lane said.

“Industry Clouds, Data Cloud, and Tableau momentum paved the way for the top-line outperformance,” the analyst wrote. He added that the company's restructuring efforts and a "reigniting" of its performance culture contributed to the margin expansion.

Check out other analyst stock ratings.

Needham On Salesforce

Analyst Scott Berg maintained a Buy rating and price target of $250.

“Salesforce reported much better-than-expected 2QF24 results powered by sales metrics ahead of generally cautious Street expectations for soft bookings,” Berg wrote in a note.

“We were impressed with the company's significant improvements in operating efficiencies, highlighted by its first 30% operating margin quarter and believe its ability to achieve a 35% margin is seemingly more achievable,” the analyst added.

RBC Capital Markets On Salesforce

Analyst Rishi Jaluria reiterated an Outperform rating and price target of $240.

“Revenue and cRPO upside to consensus was consistent with recent quarters and FY24 revenue guidance was raised by more than the Q2 beat, with cRPO more or less in-line,” Jaluria wrote.

“Management pointed to MuleSoft's strength as a key factor, with previous structural changes yielding results coupled with good data/AI positioning,” the analyst said. “However, the price increase and GenAI doesn't seem likely to be a needle-mover near-term,” he added.

William Blair On Salesforce
Analyst Arjun Bhatia reaffirmed an Outperform rating.

“Salesforce’s second-quarter results surprised to the upside again as the company continues to deliver on its profitable growth strategy,” Bhatia sad in a note.

“Margins are expanding faster than even the optimists expected (including us) and growth is proving to be more durable than the bears feared, which is a good recipe for success,” he added.

CRM Price Action: Shares of Salesforce were up 4.03% to $223.86 at the time of publication Thursday.

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