Salesforce (CRM) Expands AI Reach With Smarsh; Raises Revenue Guidance and Ups Buyback Plan

Salesforce (CRM) recently reported a 2.51% upward movement in its stock price over the past week, a period marked by significant corporate announcements. The company’s earnings report highlighted a strong quarterly performance with better-than-expected revenue and earnings per share, though the future guidance appeared conservative to some investors. Furthermore, Salesforce raised its fiscal year 2026 revenue guidance and announced an increased share buyback authorization, potentially signaling confidence in its financials. These events collectively added weight to the broader market movements, as tech stocks generally experienced a rise amid the expectation of potential interest rate cuts.

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The recent Salesforce announcements, including the increased share buyback and fiscal year 2026 revenue guidance, could potentially bolster investor confidence, aligning with expectations for accelerating AI adoption through products like Agentforce and Data Cloud. These initiatives may lead to enhanced revenue streams and operational efficiency as suggested in the narrative. Analysts already anticipate significant revenue growth and improved profit margins, and these developments may further support those projections.

Over the past three years, Salesforce has delivered a total shareholder return of 68.77%, showcasing strong performance relative to its peers. However, when compared against the broader market and software industry over the past year, Salesforce underperformed, with the market and industry achieving returns of 18.1% and 28%, respectively. This performance context might influence investor sentiment as they evaluate the company's future growth prospects and price movements.

Salesforce’s current share price of US$256.45 is trading below the consensus price target of approximately US$344.64, indicating a potential upside. If the recent corporate announcements and strategic efforts succeed, they may contribute positively to reaching revenue growth forecasts of 9.6% annually and achieving anticipated earnings of US$10.2 billion by 2028. This context might support analyst expectations, with the stock's price trading significantly below the estimated fair value and the target suggesting substantial growth potential.

In light of our recent valuation report, it seems possible that Salesforce is trading behind its estimated value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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