Salesforce (CRM) faced challenges but “pulled a comeback story,” with improved margins and growth prospects for fiscal 2025, Wedbush said in a note Tuesday.
The company had been facing criticism for lackluster growth and margins for some quarters now, but it has turned around with improving performance. Based on its checks, the brokerage now expects another solid quarter and expects CEO Marc Benioff and the management to overcome the negative sentiment.
“Investors will be closely watching [Salesforce] results and commentary from Benioff to further gauge the enterprise demand environment for software and overall appetite for the company’s freshly rolled out AI strategic roadmap with the AI Revolution on the doorstep for the tech world.”
Cross-selling was strong this quarter, especially with Mulesoft deals. Despite market challenges, integration of Slack, a cloud-based team communication platform, into the company’s suite shows promise for collaboration deals, Wedbush said. Cost-cutting efforts are slowing down, indicating a balanced growth and profitability outlook for Salesforce.
Wedbush sees Salesforce’s risk and reward as attractive, with growth and margins improving over the next 12 to18 months.
Wedbush reiterated its outperform rating and price target of $325.