Salesforce (CRM) calls itself the world’s #1 customer relationship management (CRM) platform. Its purpose is to help companies understand their customers’ needs and solve problems – all on one single platform. And right now the stock is basking in the Street’s highest praise.
This is a company that “is making all the right moves, at the right time, with the right people.” These are the words of Piper Jaffray’s Alex Zukin (Track Record & Ratings) . He has just reiterated his Buy rating on the stock following CRM’s Dreamforce conference and analyst meeting. Plus Zukin bumped up his price target from $180 to a Street-high $190 (19% upside potential).
Demand is up, tangible product innovation has increased, and breadth, depth, and scope of projects and products at the company and in the ecosystem are at ‘an all-time high’, Zukin explained to investors. The conclusion: This is a stock ‘you can set and forget.’
Best-Rated Trending Stock
He isn’t alone. A wave of analysts have published bullish ratings on the stock in the last week, while ramping up their price targets. How do we know this? TipRanks’ Trending Stocks tool highlights CRM as one of the best-rated stocks right now:
“We leave our 10th Dreamforce with both renewed and with even stronger conviction that our bull thesis on CRM shares is not only intact, but the company remains on the path to continue its durable growth at scale” gushes top Rosenblatt analyst Marshall Senk (Track Record & Ratings).
With only 38% of the base currently running multiple clouds (while generating 92% of revenues) he spies significant opportunity for cross and upselling with significant near-term opportunities around integration and marketing. Based on the bullish tone of customers, he upped his price target from $164 to $178.
A healthy long-term outlook
Meanwhile Oppenheimer’s Brian Schwartz (Track Record & Ratings) now sees prices hitting $180 (up from $160 previously). According to Schwartz: “We consider CRM one of the healthiest long-term growth stories in our SaaS/applications software universe.” Indeed, Salesforce has just revised their TAM to $140B, growing at a compound annual growth rate (CAGR) of 7% from the calendar year 2018 to 2022.
He zeroes in on the company’s ‘upbeat’ presentations at the recent analyst meeting. “We found the company’s product updates, partnership news with Apple and Amazon, and overall commentary on the strategy, business trends and opportunities, as positive” Schwartz explains.
For example, CRM announced a new strategic partnership with Apple that integrates the CRM mobile app with iOS so it can be natively deployed.
Net-net, this is a clear ‘secular winner’ and one of the best-positioned vendors for sustaining durable growth and cash generation while gaining share for the foreseeable future says the analyst.
Schwartz tells investors to ‘stay the course’ as he sees a strong growth trajectory with steady operating and cash margin improvements over the next 12-24 months. “With this backdrop, we believe the stock price can continue moving higher over the forward twelve months” he concludes.
Street consensus: Bullish
Here we can see that the Street has an almost unanimously bullish take on the stock. In the last three months no less than 26 analysts have published Buy ratings on the stock, vs just 2 hold ratings. This comes with a $175 price target.
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