Salesforce Analyst Says Risk-Reward On Stock ‘Compelling’ Ahead Of Q3 Print: Retail Shares The Optimism

Customer relationship software provider Salesforce. Inc. ($CRM) is scheduled to release its fiscal year 2025 third-quarter results after the market closes on Tuesday.

Analysts, on average, expect the company to report non-GAAP earnings per share (EPS) of $2.44 compared to the year-ago’s $2.11 and the previous quarter’s $2.56.

Revenue is estimated at $9.35 billion, up about 7% year-over-year (YoY) from the $8.72 billion reported for the year-ago quarter. For the preceding second quarter, the company reported 8% YoY revenue growth to $9.33 billion, with remaining performance obligations up 10% YoY at $26.5 billion. 

The guidance issued in late-August models third-quarter revenue of $9.31 billion-$9.36 billion.

Wedbush’s Daniel Ives expects a strong quarter and cloud outlook. In a note released Sunday, the analyst said his channel checks indicated that more customers saw elevated use cases for Salesforce’s entire product portfolio.

Salesforce’s Einstein 1 platform uses artificial intelligence (AI) to create customizable, predictive, and generative AI experiences to fit all business needs. The company’s Agentforce allows organizations to build and manage autonomous agents. 

Salesforce’s management will host an earnings call at 5 p.m. ET. 

Looking ahead, the Marc Bernioff-led company expects revenue of $37.7 billion-$38 billion. It expects subscription and support YoY revenue growth of slightly below 10%.

Wedbush’s Ives said, “We continue to believe the risk/ reward on CRM is very compelling at current levels as the Agentforce strategy plays out over the coming years while the installed base opportunity is still underappreciated by the Street.”

Ives has an “Outperform” rating and $375 price target for Salesforce stock. “CRM remains one of our favorite tech names heading into 2025,” the analyst said. 

Salesforce is a second derivative beneficiary of the AI revolution, which could potentially add about $40 per share to the story, he added. 

CRM sentiment and message volume December 2, 2024, as of 1:10 am ET | Source: Stocktwits

On Stocktwits, users are generally ‘bullish’ (58/100) on Salesforce stock, although message volume remained ‘normal.’

Salesforce shares ended Friday’s session little changed at $329.99, and they are up about 26% year-to-date. 

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