On Thursday, Mizuho Securities adjusted its outlook on shares of Salesforce.com Inc (NYSE:CRM), reducing the price target to $300 from the previous $345, while still maintaining a Buy rating on the stock. The revision follows Salesforce's first-quarter earnings, which revealed a slight miss in constant currency calculated remaining performance obligations (cRPO) growth year-over-year.
Salesforce reported a 10% year-over-year growth in F1Q constant currency cRPO, which was marginally below the management's guidance of 11%. Additionally, the company slightly lowered its FY25E subscription and support revenue guidance. Despite this, management highlighted the continued strong demand for its Data Cloud and artificial intelligence offerings.
The financial institution's analyst believes that Salesforce is well-positioned to assist its extensive customer base with managing revenue and process optimization through digital transformation. The analyst emphasized the company's focus on profitable growth in the face of a challenging macroeconomic environment and a less-than-expected first-quarter performance.
Salesforce's commitment to aiding businesses in their digital transformation efforts is seen as a key driver for its future success. The company's emphasis on profitable growth is considered a new chapter in its evolution, indicating a strategic pivot towards sustainability and efficiency amidst external economic pressures. The updated stock price target reflects these considerations, as well as the potential for Salesforce to continue to thrive in its market segment.
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