Citizens Financial Group maintained its Market Outperform rating and $315 price target for Salesforce.com following the company’s fiscal second-quarter results, which significantly exceeded analyst expectations.
Salesforce reported non-GAAP earnings per share of $5.90, surpassing the consensus estimate of $3.27 by 80%. The beat included a $2.53 benefit from a strategic investment gain. Total revenue reached $11.345 billion, above the $11.33 billion consensus and up 11% year-over-year. Subscription revenue totaled $10.82 billion, exceeding the $10.79 billion estimate and rising 12% YoY, though decelerating from 14% growth in the prior quarter.
Current Remaining Performance Obligation (cRPO) rose 13.9% year-over-year to $33.5 billion, accelerating from 13.5% growth in the previous quarter. In constant currency terms, cloud revenue potential and contracts reached $33.5 billion, reflecting a 14% increase. Agentforce annual recurring revenue exceeded $1.5 billion, up approximately 240% year-over-year, accelerating from 205% growth in the prior quarter.
Free cash flow increased 81% to $1.1 billion, while valuation metrics showed a P/E ratio of 23.86 and a PEG ratio of 0.6. The company raised its full-year revenue guidance to a range between $46.1 billion and $46.4 billion, with Informatica estimated to have contributed over 4 percentage points to revenue growth.
Jefferies raised its price target to $300, while Bernstein adjusted its target to $195 but maintained an Underperform rating. Salesforce shares surged 13% in after-hours trading following the report. Year-to-date, the stock had declined 22% prior to the earnings release, compared with gains of about 12% for the S&P 500 and 13% for the Russell 3000.
