A prolonged sell-off in growth and tech stocks has impacted even the most fundamentally sound businesses, like Salesforce.com, Inc. (CRM). The cloud-based customer relationship management software firm has lost about 35% of its valuation since November 29, when a series of negative macroeconomic forces pushed markets lower. Now, analysts have opened up bullish hypotheses on the company, expecting a strong earnings report despite the recent tumult.
One of these bullish individuals is Brian Schwartz of Oppenheimer, who calculated that “Salesforce is successfully replacing legacy vendors as the preferred enterprise-SaaS-supplier for front-office digital transformation.” He went on to detail that CRM will most likely close the fiscal year experiencing robust demand and strong business performance.
Schwartz rated the stock a Buy, and reiterated his price target of $310. This target now represents a possible 12-month upside of 60.2%.
Salesforce is expected to release earnings March 1, after market hours.
The company’s strong pipeline provides yet another reason why the highly accurate analyst sees the recent pullback as an attractive buying opportunity. He appreciates Salesforce’s “dominant market positioning, rapid innovation, strong execution, fast organic growth, and [its] ability to enter new markets.”
Despite his optimism, Schwartz did admit that there are less rosy portions of the company as well. Salesforce’s 2018 acquisition of IT integration software firm MuleSoft has lagged behind, and he argued that any deceleration in IT spending will impact front office suppliers first and foremost.
However, he remains staunchly confident in the firm, calling it a “proven market share taker that possesses disruptive products and a powerful corporate culture.”
On TipRanks, CRM has an analyst rating consensus of Strong Buy, based on 20 Buy and three Hold ratings. The average Salesforce price target is $322.29, indicating a possible 12-month upside of 68.34%.
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