Salesforce (CRM) continued to produce double-digit growth in its fourth-quarter results, with growing traction highlighted in its flagship artificial intelligence offering, Agentforce, but several analysts are taking a wait-and-see approach.
“Salesforce highlighted an impressive Agentforce product ramp—Agentforce annual recurring revenue of $800 million (up 169%), Data 360 now at $1 billion in ARR, Agentforce deal count exceeding 29,000 (up 50% QoQ), with over 60% of the Agentforce and Data 360 bookings in the quarter coming from expansion of existing Agentforce customers (indicating ramping usage of the solution),” said Morgan Stanley analysts, led by Keith Weiss, in a Thursday investor note.
However, Weiss indicated that the Agentforce product cycle alone is not enough to lure more investors to the stock. They also need to see revenue growth accelerate.
“In that regard the quarter fell flat,” he noted. “After subtracting out a 3% currency benefit and a 4% point contribution from recently acquired Informatica from the 16% YoY current remaining performance obligation (cRPO) growth, the 9% organic CC cRPO growth comes just in line with the company’s Q4 guidance and shy of investor expectations for a 100-150 bps beat.”
Morgan Stanley retained its Overweight rating and $287 price target.
Meanwhile, J.P. Morgan also retained its Overweight rating and lowered its price target to $320 from $365.
“While organic cRPO growth of ~9% CC came in only very slightly above guidance rather than meaningfully exceeding it, we note that cRPO may increasingly understate underlying demand as the business model shifts toward consumption-based Flex Credits (50% of Q4 Agentforce bookings), a dynamic the company itself flags may alter the traditional cRPO-to-revenue relationship,” said J.P. Morgan analysts, led by Mark Murphy, in a note. “Coupled with a record $50B buyback authorization, FY27 revenue guidance roughly in line with consensus, and Salesforce’s commitment to organic revenue growth reacceleration in 2H FY27, we view Q4 as reinforcing the eventual growth inflection thesis despite the margin guide-below and lingering softness in Marketing & Commerce and Tableau.”
Wells Fargo maintained its Equal-weight rating and reduced its price target to $210 from $235.
“Our estimates are left largely unchanged as Agentforce strength was offset by less 4Q upside than expected,” said Wells Fargo analysts, led by Michael Turrin, in a note. “Though mgmt commentary continues to call for 2H’27 reaccel, we await clearer signs given leading indicators still fading and maintain EW.”
Citi Research reiterated its Neutral rating and $197 price target.
“All in, the results were disappointing on an organic basis with a miss on revenue, negative marketing/commerce growth, and decelerating Data Cloud/Agentforce ARR growth,” Citi noted. “The organic growth initiatives around Agentforce do not appear to be enough to reaccelerate the business (at least so far), and we expect shares to trade down.”
Finally, Wedbush maintained its Outperform rating but reduced its price target to $325 from $375. Wedbush continues to argue that the enterprise software sell-off due to AI concerns is overblown.
“This was a step in the right direction for CRM as Agentforce continues to build incremental momentum with a strong pipeline, putting the company on its way to reach its $63 billion revenue target by 2030,” said Wedbush analysts, led by Dan Ives, in a note.
Salesforce also announced a monstrous $50B share buyback program, which replaces all previously unused authorizations.
Shares had inched up 0.4% during early market trading on Thursday.
Salesforce competitors ServiceNow (NOW) and monday.com (MNDY) were up 2% and 0.2%, respectively. SAP (SAP) had increased 1.6%, and Oracle (ORCL) had increased by 0.5%.