Analysts’ Views on Salesforce’s Stock

Earlier in this series, we discussed Salesforce’s (CRM) fiscal 3Q17 earnings. Considering its guidance to record $10 billion in revenue in fiscal 2018, it appears that its strategy to grow in the rapidly expanding and competitive cloud space is working.

Salesforce is a prominent player in the software space, along with Microsoft (MSFT), Oracle (ORCL), IBM (IBM), and SAP (SAP). Let’s take a look at the market views on and metrics of Salesforce.

Among the 46 analysts covering Salesforce’s stock, only one has a “sell” recommendation. As we can see in the chart above, more than 90% of analysts have “buy” recommendations.

Salesforce’s stock price movement in the last month has been positive. As of November 22, the company’s stock had fallen ~2.9%. However, in the last year, Salesforce’s stock value has fallen ~6%. Growing competition in the cloud space and indications of revenue growth slowing down have impacted Salesforce’s stock in the last year.

Goldman Sachs (GS) analyst Heather Bellini stated that “In our view, CRM posted strong F3Q17 results which we see as confirming last quarter’s underperformance as a ‘blip’. On an organic constant currency basis, we estimate billings growth accelerated to 20% versus 17% last quarter.” The research house reiterated its “buy” rating on the company’s stock, with a price target of $96.

The Wall Street consensus target price for Salesforce was $94.42 per share on November 22, 2016, and the median target price was $95. Salesforce’s closing price was $76.15 that day.