Salesforce Gains Momentum With GenAI Platform, Here's What 9 Analysts Have To Say

Shares of Salesforce Inc CRM rose in premarket trading on Thursday, after the company reported higher-than-expected sales and earnings for the fourth quarter.

Here are some key analyst takeaways from the release.

• JMP Securities analyst Patrick Walravens maintained a Market Perform rating, while raising the price target from $293 to $342.
• Truist Securities analyst Terry Tillman reiterated a Buy rating, while lifting the price target from $275 to $360.
• Mizuho Securities analyst Gregg Moskowitz reaffirmed a Buy rating, while raising the price target from $325 to $345.
• BMO Capital Markets analyst Keith Bachman maintained an Outperform rating, while lifting the price target from $325 to $335.
• Piper Sandler analyst Brent Bracelin reiterated a Neutral rating, while raising the price target from $285 to $300.
• RBC Capital Markets analyst Rishi Jaluria reaffirmed an Outperform rating, while lifting the price target from $285 to $325.
• Roth Capital Partners analyst Richard Baldry maintained a Buy rating, while raising the price target to $335.
• Oppenheimer analyst Brian Schwartz reiterated an Outperform rating and price target of $325.
• Wedbush analyst Daniel Ives reaffirmed an Outperform rating and price target of $325.

Check out other analyst stock ratings.

JMP Securities: Salesforce's fourth-quarter non-GAAP earnings of $2.29 per share beat the consensus of $2.27 per share, while non-GAAP operating margin of 31.4% came in slightly short versus expectations of 31.5%, he added.

Management guiding first-quarter revenue of $9.12 billion to $9.17 billion, which includes a currency headwind of $50 million, and full-year revenue of $37.70 billion to $38.00 billion, which includes a $100 million forex headwind, the analyst stated.

Truist: Salesforce reported “solid” quarterly results, “with upside to our ests for rev, profitability, CF & cRPO,” Tillman wrote.

The company announced its first-ever dividend of 40 cents per share, he added. It also generated another quarter of non-GAAP operating margin north of 30%. Salesforce's Data Cloud segment approached $400 million in annual recurring revenue (ARR).

“Conservative FY25 rev guidance on measured buying environment alongside impressive operating CF growth guide for FY25,” Tillman added.

Mizuho Securities: Salesforce delivered a good quarter, with excitement building for artificial intelligence (AI), Moskowitz said.

“Mgmt expressed much bullishness on its new Einstein GPT Copilot technology, which will deliver AI-driven content across all sales, service, marketing, commerce and IT interactions,” the analyst wrote. They cited “strong demand for its new Einstein 1 (AI) platform, which is fueling greater upsell activity as well as new logo improvement,” he added.

BMO Capital Markets: Salesforce generated strong quarterly results, although its fiscal 2025 revenue guidance was slightly below expectations, “hurt by professional services,” Bachman said. “Moreover, salesforce initiated its first dividend, which we think is appropriate given the current revenue run-rate,” he added.

“Over time, we believe salesforce will attempt to use the adoption of Data Cloud to upsell customers into the new premium Einstein One SKU that includes Data Cloud and future generative AI solutions,” the analyst further stated.

Piper Sandler: “The trifecta of a 32.5% operating margin guide, $10B expanded buy-back, and initiation of a dividend should keep bullish investors intrigued in CRM,” Bracelin wrote in a note.

He added, however, that the company’s growth story is a concern, “with a F2025 growth outlook of 8.6% (10% on subscription), which fell below consensus of 11% impacted by declining pro-services and transactional create/ close uncertainty.”

RBC: “Against high expectations, initial FY25 total revenue guidance in single-digit territory led shares down 2% after-hours,” Jaluria said. He added, however, that the earnings call suggests “healthy conservatism in the guide.”

“All in all, there was plenty to like (including Data Cloud/GenAI air time) and it's likely worth being patient as improving fundamentals should gradually lift numbers in the back half,” the analyst further wrote.

Roth Capital Partners: “With activists partially successful in curbing CRM's worst operational tendencies, such as steady dilution from expensive acquisitions and exorbitant stock-based compensation, F24 offered record PF EPS throughout and again in 4QF24 which had narrow earnings and revenue upside,” Baldry wrote.

“Although F25 revenue growth guidance of 9% was weak to leave forecasts cut (earnings were guided higher), an expanded buyback and the addition of a dividend should broaden its investor base to support further valuation upside,” he added.

Oppenheimer: Salesforce’s guidance for operating and cash flow margins for fiscal 2025 exceeded expectations, Schwartz said.

“Management also gave strong commentary and a new Data Cloud metric (i.e., $400M ARR, grew 90% y/ y) which sheds light on Salesforce's AI monetization success and favorable competitive positioning,” he added.

Wedbush: “The company was able to perform well across all financial metrics with the crucial RPO number of $56.9 billion (up 17% y/y) and total deals over $10 million grew 78% y/y as use cases continue to build out,” Ives said.

“One of the biggest initiatives in the field is around monetizing the AI theme within the CRM massive installed base,” he added.

CRM Price Action: Shares of Salesforce had risen by 2.3% to $306.95 at last check on Thursday.

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