Salesforce Stock Outlook: Is Wall Street Bullish or Bearish?

San Francisco-based Salesforce, Inc. (CRM), with a market capitalization of $307.8 billion, is a leading provider of customer relationship management (CRM) technology designed to strengthen the connections between companies and their customers to strengthen. The company offers a comprehensive suite of on-demand CRM solutions that include sales, marketing, customer service, analytics and custom application development.

CRM shares have outperformed the overall market over the past year. CRM has gained 52.2% in the period, while the broader S&P 500 index ($SPX) has gained nearly 36.8%. However, in 2024, CRM shares are up 22.4%, while SPX shares are up 25.7% on a YTD basis.

Narrowing the focus, CRM outperformed the SPDR S&P Software & Services ETF (XSW).. The exchange-traded fund has gained around 45.6% over the past year. But the stock falls short of the ETF’s 22.9% gain on a YTD basis.

Despite outperforming the broader market last year, CRM shares fell 2% and remained in the red for a week after reporting second-quarter fiscal 2025 results on Aug. 28. Salesforce reported revenue of $9.3 billion, up 8.4% year-over-year and in line with analyst expectations.

For the current fiscal year ending January 2025, analysts expect CRM’s earnings per share on a diluted basis to rise 24.6% to $7.55. The company’s earnings surprise story is impressive. It beat consensus estimates in each of the last four quarters.

Among the 43 analysts covering CRM stock, the consensus rating is “Strong Buy.” This is based on 30 Strong Buy ratings, three Moderate Buys, nine Holds and one Strong Sell.

This setup is slightly more bullish than two months ago, with 28 indicating a “strong buy.”

On October 28, Stifel Financial Corp. (SF) raised its price target on CRM from $320 to $350 and maintained a Buy rating. While Stifel acknowledged the uncertainty about Salesforce’s agent-based AI potential, he decided to hold off on model updates until insights were gained from the company, early users and partners. However, the company estimates that Salesforce’s Agentforce service agent alone could represent a multibillion-dollar opportunity and notes that the company’s current valuation may understate the sustainable revenue growth potential of this new model.

While CRM is currently trading above the average price target of $316.05, the Street high price target of $400 suggests an upside potential of 24.2% from prevailing market prices.

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At the time of publication, Kritika Sarmah did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please see Barchart’s disclosure policy here.

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