Salesforce New York Stock Exchange: CRM The third quarter’s results and guidance weren’t spectacular compared to analysts’ forecasts, but beauty comes in perspective; it’s in the eye of the beholder. Despite mixed results, Salesforce has proven that its leadership position in the CRM space remains intact and can support long-term profitable growth. Key details include nearly 10 percent core business growth driven by the 4th Industrial Revolution.
The Fourth Industrial Revolution is technology-focused and accelerated by artificial intelligence. Salesforce has built machine learning and artificial intelligence capabilities into its platform from the start. It is now a leader in business automation, providing tools that businesses use to increase efficiency, increase sales, improve cash flow and reduce costs.
Agentforce, a suite of artificial intelligence automation tools built into the platform, played a central role in its third-quarter success and is just one reason why the stock’s rally is just getting started.
Salesforce stock forecast today
US$370.50
Growth potential 2.74%Moderate purchase
Based on 41 analyst ratings
| High forecast | $450.00 |
|---|---|
| Average forecast | US$370.50 |
| Low forecast | $236.00 |
Salesforce Inventory Forecast Details
Capital gains fuel strong technical growth in CRM stock
The technical outlook is another reason why CRM stock will continue to rise in 2025. The CRM market has completed a major consolidation over the past two years and has surged to new highs this year. The breakout to near highs is important because it sets into motion technical targets based on the size of the rally and the trading range leading up to it.
The base case assumes a $100 upside from the critical resistance point and a $200 upside potential over the next two years. This puts the market in the $400 to $500 range, which could continue to rise and rise above $500 due to the company’s financial health and return on equity.
Salesforce delivered mixed results in the third quarter of 2024, but the mixed results were relative to strong expectations and strong cash flow. The company expanded its GAAP and adjusted operating margins, grew cash flow at an accelerated pace, increased free cash flow 30% to $1.78 billion or nearly 19% of revenue, and posted positive quarterly cash flow despite business investments and robust returns on equity. . The return of capital includes share repurchases and dividends, which represent a 2% compound annual return.
Share repurchases reduced share count by 1.6% for the quarter and just over 1% for the year.
Balance sheet highlights include lower cash and lower accounts receivable, offset by lower liabilities and stable equity. Liabilities fell more than assets, which would have increased capital if not for the buyout. Treasury shares rose 65% year over year, up about $7.7 billion, to $19.4 billion, and are expected to rise next year.
Analysts Will Take CRM Stock to New Highs in 2025
Analyst response to Salesforce results and recommendations has been excellent. More than a dozen changes tracked by MarketBeat are positive, including higher price targets. The new goals range from $375 to $450. It includes a new high target with a mean and median above $400, well above the pre-release consensus. The target range is consistent with the technical baseline scenario and could be achieved by the end of 2024 or early 2025.
Institutional efforts will help boost this market. The balance of activity in 2024 is strongly bullish, with buyers outpacing sellers by a 2:1 ratio and activity strong in the fourth quarter.
The form of ownership is wide: public, private and stock investors are represented. Activity in the fourth quarter included several notable job increases among private wealth managers. Collectively, these institutions own more than 80% of the shares and represent a significant force in the market.
The main risk is valuation. The stock is trading at 35 times earnings this year and 30 times earnings next year, which is high for leading technology companies. However, the company is growing steadily and profitably, has a favorable outlook and generates strong cash flow.
In this scenario, the stock deserves and can maintain a premium as long-term prospects continue to undervalue it. Earnings per share are forecast to double over the next eight years, putting the forward price multiple below 17X and in value territory.
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