Salesforce price hikes could provide 2024 top line tailwind, says Evercore ISI

After Salesforce announced a 9% price increase across several products, Evercore ISI noted that this will be the company’s first price hike in seven years. While there will “clearly be some complaints from customers,” a 9% increase is “pretty reasonable” given that other SaaS companies have pass through annual increases in the 4%-5% ranges, the analyst tells investors. While the “core” of the bull case remains centered on the continued push higher in operating margins and free cash flow per share growth, the firm believes the pricing action could be a tailwind to calendar 2024 top line results and Evercore keeps an Outperform rating and $240 price target on Salesforce shares.