Salesforce Inc surged 10.2% in pre-market trading on August 26 after the company reported fiscal second-quarter 2027 results that exceeded analyst expectations across key metrics.
The San Francisco-based software provider posted adjusted earnings per share of $5.90, an 80% increase from $3.27 a year earlier and well above the $3.27 consensus estimate. Revenue rose 11% year-over-year to $11.35 billion, narrowly surpassing the $11.32 billion estimate. Free cash flow nearly doubled to $1.1 billion from $643 million a year ago, also outpacing the $643 million estimate.
Full-year adjusted EPS guidance was raised to a range of $16.67 to $16.71, up from the prior $14.06–$14.12. Current remaining performance obligations grew 14% in constant currency, exceeding the 13% guidance provided. Annual recurring revenue from Agentforce reached $1.5 billion, a 240% increase year-over-year, while combined Data 360 and Agentforce ARR totaled $3.9 billion, up 210% with 50% of bookings from expansions.
Gross margin expanded to 77.7% from 75.5% a year ago, marking the third consecutive year of improvement. Net margin increased to 18.0% from 11.9% two years prior. The company’s forward price-to-earnings ratio stood at 14.2x, with a last-twelve-month P/E of 21.0x and an enterprise-value-to-EBITDA multiple of 14.8x. Free cash flow yield was 8.7%, while debt-to-equity remained elevated at 124.3%.
Analysts responded with upward revisions to price targets. Citizens raised its target to $315 from a prior level, while Jefferies lifted its target to $300 from $250. Oppenheimer set a new target of $275, up from $250, and Mizuho raised its target to $265 from $250. BMO Capital increased its target to $260 from $230, Cantor Fitzgerald set a target of $250, and Wells Fargo adjusted its target to $230 from $205. The stock’s fair-value estimate was cited at $310.79, implying potential upside of 37% to 51% depending on reference pricing.
Technical indicators showed improving momentum, with daily and weekly relative strength index readings at 62.6 and 56.9, respectively. Weekly pivot support was identified at $203.38, with first resistance at $216.85.
Salesforce also highlighted its partnership with Anthropic, integrating the reasoning model Claude into workflows under the name Claudeforce. The company noted a $5.6 billion government contract pipeline, including a U.S. Army deal, though execution risk was flagged as a potential headwind.
