Salesforce Q3 Earnings Preview: Analyst Says 'Transitional Year' Coming, Recommends To Add Shares On Pullbacks

Analysts expect Salesforce Inc CRM to post revenue of $9.35 billion for the third quarter after market close Tuesday.

That’s up from $8.72 billion in last year's third quarter, according to data from Benzinga Pro.

The cloud-based software company beat revenue estimates in the second quarter. It has beaten analyst estimates in nine of the past 10 quarters overall.

Analysts anticipate Salesforce’s third-quarter earnings per share to be $2.44, up from $2.11 in last year's third quarter. The company has beaten analyst estimates for earnings per share in more than 10 straight quarters.

Guidance from the company calls for third-quarter revenue to be in a range of $9.31 billion to $9.36 billion. Earnings per share should fall between $2.42 to $2.44.

Read Also: Salesforce Stock Balances Bullish, Bearish Signals Ahead Of Earnings

What Analysts Are Saying: Salesforce has two more quarterly results to report for fiscal 2025.

"F2026 is shaping up to be an important transitional year for CRM as it executes on laying the groundwork to bring AI agents to the enterprise masses with new pricing and packaging offers that could better position the company for a F2027 rebound," Piper Sandler analyst Brent Bracelin said.

Bracelin maintained an Overweight rating and raised the price target from $325 to $395 in a new investor note.

There could be some downside risk to fiscal 2026 revenue estimates, he added. But free cash flow growth could be a key moving forward. Pressure includes macroeconomic concerns, budget battles for customers, AI experimentation and longer sales cycles.

"Investor sentiment has clearly improved with CRM shares +30% in the last three-months. We would look to opportunistically add to positions on potential pullbacks."

Needham analyst Scott Berg maintained a Buy rating and $345 price target on Salesforce ahead of the third-quarter financial results.

"We expect CRM to report modest upside during third quarter as we believe the overall demand environment showed signs of subtle improvement versus last quarter," Berg said.

The analyst expects a "marginal upside" in the third quarter after a second-quarter report mostly in line. Positive pipeline trends have been driven by Agentforce, which will be a main topic of discussion from the company, Berg added.  

"We expect strength in the quarter to be driven by the continued ramp of Data Cloud, which could gain a tailwind from the recently released Agentforce solution."

Berg said Agentforce could drive incremental sales to sales and services and the demand for the product could help re-accelerate subscription revenue growth.

Price Action: Salesforce stock was down 0.11% from $331.01 in pre-market trading Tuesday versus a 52-week trading range of $212 to $348.86. Salesforce stock is up 29% year-to-date in 2024.

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