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Salesforce Stock: Analyst Insights and Market Expectations Ahead of Earnings
Salesforce's stock rose significantly following the company's positive third-quarter earnings report and optimistic full-year outlook, driven by strong AI integration and increased revenue projections.
Salesforce (NYSE: CRM) has seen a notable increase in its stock price following the release of its third-quarter fiscal 2025 financial results. The company reported a revenue of $9.44 billion, surpassing analyst expectations of $9.35 billion, and an adjusted earnings per share of $2.41, slightly below the expected $2.44. This performance was largely driven by the company's AI system, Agentforce, which has been a key factor in boosting subscription and support sales by 9% year-over-year to $8.9 billion.
The San Francisco-based company has raised its full-year revenue outlook to between $37.8 billion and $38 billion, adding $100 million to the lower end of its previous guidance. This optimistic forecast is supported by the company's continued integration of AI capabilities across its offerings, which has led to increased adoption and a 30% year-over-year rise in its current remaining performance obligations to $26.4 billion.
Salesforce's stock climbed over 10% in after-hours trading on December 3, 2024, reflecting investor confidence in the company's strategic direction and growth potential. The company's adjusted operating margin also improved by 190 basis points year-over-year to 33.1% in Q3, contributing to a 14% increase in the bottom line.
Looking ahead, Salesforce expects its revenue to grow between 7-9% in the next quarter, with earnings projected to be in the range of $2.57-2.62 per share on an adjusted basis. Despite the positive outlook, some analysts caution that the company's stock may have limited room for growth after the recent surge, with a valuation estimate of $390 per share based on expected earnings in fiscal 2026.
Overall, Salesforce's strong quarterly performance and promising AI strategy have positioned the company for continued success, although market volatility and macroeconomic factors remain potential challenges.
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