Analyst Ratings Coverage
on Friday November 24th, Citigroup (Rank#14) issued a research report on Salesforce, raising the 12 month target forecast on the stock to $247 from $229 per share. The analyst also maintained the “Neutral” rating on the company.
Salesforce Stock Analysis
According to the consensus of 32 analysts, the average analyst target price for Salesforce.com Inc. is USD 244.92 over the next 12 months. This forecast suggests an optimistic view regarding the future performance and potential appreciation of Salesforce.com Inc.’s stock. The average analyst rating for the company is classified as “Strong Buy,” reflecting a high level of confidence among analysts in the stock’s prospects.
Stock Target Advisor, an independent stock analysis platform, has conducted its own assessment of Salesforce.com Inc., characterizing the analysis as “Slightly Bullish.” This categorization is based on a thorough examination of 5 positive signals and 3 negative signals derived from their proprietary analysis methodology. The “Slightly Bullish” designation implies a moderately positive stance on Salesforce.com Inc.’s stock performance.
As of the most recent closing, Salesforce.com Inc.’s stock price was USD 223.84. Notably, the stock has displayed positive momentum in recent periods, with a 1.08% increase over the past week, a significant 10.81% increase over the past month, and an impressive 47.03% increase over the last year. These upward trends in stock price indicate strong market response and investor confidence in Salesforce.com Inc.’s business operations and growth potential
Fundamental Analysis
Positive Factors:
- Positive Cash Flow: Salesforce has demonstrated positive total cash flow in the most recent four quarters, indicating healthy liquidity and operational strength.
- Positive Free Cash Flow: The company has generated positive total free cash flow in the most recent four quarters, showcasing its ability to generate cash after necessary expenditures.
- Superior Return on Assets: Salesforce’s management has consistently delivered a better return on assets in the last four quarters compared to its peers, placing it in the top quartile and reflecting efficient asset utilization.
- High Market Capitalization: Being one of the largest entities in its sector, Salesforce enjoys a high market capitalization, making it more stable and potentially resilient to market fluctuations.
- Superior Earnings Growth: Over the previous five years, Salesforce has exhibited top quartile earnings growth compared to its sector, indicating strong and sustained financial performance.
Negative Factors:
- Overpriced Compared to Earnings: The stock is trading at a higher valuation compared to its peers on a price-to-earnings basis, surpassing the sector median. This could suggest that the market may have already priced in high future growth expectations.
- Overpriced on Cash Flow Basis: Salesforce’s stock is trading at a premium compared to its peers on a price-to-cash-flow basis, exceeding the median for its sector. This may raise caution about the stock’s valuation relative to its cash flow generation.
- Overpriced on Free Cash Flow Basis: Similarly, the stock is deemed expensive when considering the price-to-free-cash-flow ratio compared to its peers, surpassing the sector median. Investors are advised to exercise caution when contemplating a purchase, considering the potentially elevated valuation.
