Salesforce Impresses at Investor Day; Shares Hit a New High

Salesforce (CRM) updated its Fiscal 2022 revenue guidance and initiated Fiscal 2023 guidance at the company’s Investor Day. Following the news, shares soared 7.2% and touched a new yearly high of $279.39 on September 23.

Salesforce is an American cloud-based software company specializing in providing customer relationship management (CRM) services. Shares have gained 17% over the past year. (See Salesforce stock charts on TipRanks)

Salesforce increased its FY22 revenue outlook by $50 million to fall in the range of $26.25 – $26.35 billion, representing approximately 24% year-over-year growth.

Additionally, the company expects its non-GAAP operating margins to be around 18% and operating cash flows of about $5.5 billion in FY22.

Furthermore, the company initiated its FY23 revenue outlook to be in the range of $31.65 – $31.80 billion, implying 21% year-over-year growth. Also, the company guided for a FY23 non-GAAP operating margin of 20%.

Notably, Salesforce expects its total addressable market (TAM) to be around $248 billion by the end of 2025. Notably, CRM targets its revenue to grow to more than $50 billion by Fiscal 2026.

In response to Salesforce’s upbeat FY22 guidance and initiation of FY23 outlook, Stifel Nicolaus analyst Parker Lane maintained a Buy rating on the stock with a price target of $315, implying 13.4% upside potential to current levels.

Parker is impressed with the company’s consistent delivery of 20% top-line growth and believes that the updated guidance will be favorably accepted by investors.

Having said that, the analyst believes that investors may be looking for more clarity on the company’s long-term model framework but noted that management may not be in a position to provide more detailed long-term operating targets.

Overall, the stock commands a Strong Buy consensus rating based on 30 Buys and 7 Holds. The average Salesforce price target of $305.09 implies 9.8% upside potential to current levels.

Additionally, Salesforce scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.