CRM Stock Slips In Early Trade - This Analyst Says Salesforce Results, Outlook Unlikely To Win Over Either Bulls Or Bears

• BMO Capital added that investors will likely be in a wait and watch mode for the evidence of revenue growth.
• DA Davidson analyst said that even though Salesforce first-quarter earnings gave a solid start to the year, it could not provide ‘the ammunition’ for bulls to get more constructive.
• Roth Capital analyst Richard Baldry kept a ‘Buy’ rating on the stock and maintained a $325 price target.

Shares of Salesforce (CRM) slipped on Thursday after the software developer’s quarterly earnings left Wall Street wanting more, as multiple analysts lowered their price target on the stock.

At the time of writing, CRM stock was down over 2.5%.

Wall Street Needs More From CRM

Gil Luria, analyst at DA Davidson, lowered the company’s price target to $175 from $200 and kept a ‘Neutral’ rating on the stock. The firm noted that even though Salesforce first-quarter earnings gave a solid start to the year, it could not provide ‘the ammunition’ for bulls to get more constructive and endorse the revenue acceleration narrative in the second half of FY27, according to TheFly.

BMO Capital also cut its price target on Salesforce to $215 from $225 and kept an ‘Outperform’ rating. The firm said the results and guidance ‘are not likely to be sufficient to convince either bears or bulls to switch sides,’ offering "limited changes to FY27 top-line growth expectations." 

The brokerage added that investors will likely be in a wait and watch mode for the evidence of revenue growth and its sustainability before getting more constructive on the stock. Though it remains positive given ‘the potential for improved revenue growth and the undemanding valuation.’

Meanwhile, Roth Capital analyst Richard Baldry kept a ‘Buy’ rating on the stock and maintained a $325 price target, implying potential upside of about 83% from Wednesday’s closing price.

The analyst added that even though the revenue growth has been weak for a couple of years, compelling cost cuts and controls, the $25 billion debt-funded accelerated buyback has allowed earnings per share to grow at a faster pace. 

Baldry also flagged management's expectation of revenue growth acceleration in the second half of FY27 as a potential catalyst, though he believes the stock will likely stay range-bound until that milestone is actually achieved.

CRM Q1 Earnings

The company reported first-quarter revenue of $11.13 billion, surpassing Wall Street expectations of $11.05 billion, according to Fiscal.ai data. Salesforce noted that the results were boosted by a $444 million contribution from Informatica acquisition.

Q1 adjusted earnings of $3.88 per share were also ahead of analysts’ expectations of $3.13 per share.

Salesforce guided second quarter revenue of $11.03 billion, narrowly missing consensus of $11.4 billion while it sees full-year FY27 revenue to be in the range of $45.9 billion to $46.2 billion, also missing analysts’ expectations of $45.76 billion to $47.42 billion.

What Retails Thinks About CRM

The retail sentiment surrounding the stock has improved to ‘extremely bullish’ from ‘bullish’ while message volumes increased to ‘extremely high’ from ‘high’ over the past 24 hours.

CRM stock has declined more than 31% year to date.

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