Salesforce's Q1 Earnings Report Awaited Amid Growth Concerns

Citigroup analyst Tyler Radke has released a research report maintaining a "hold" rating for Salesforce (CRM.US) while lowering its target price from $335 to $320. This adjustment comes as the company is set to release its first-quarter financial results on May 28, Eastern Time. The move reflects concerns over the company's growth momentum, which has been under scrutiny. Investors and analysts alike are eagerly awaiting the Q1 earnings report to validate the current market sentiment and the company's performance. The upcoming financial report is expected to provide clarity on Salesforce's growth trajectory and its ability to meet market expectations.

Radke noted that market demand for Salesforce's products is showing signs of divergence. While its artificial intelligence agent platform, Agentforce, has garnered significant attention, its actual contribution remains limited. The core CRM business is experiencing noticeable fluctuations in demand, with some sectors slowing down while others continue to expand. This trend was evident in Salesforce's fourth-quarter results for the fiscal year 2025, where adjusted earnings per share of $2.78 exceeded market expectations of $2.61, but revenue of $99.9 billion fell short of the anticipated $100.4 billion.

Radke also mentioned that Salesforce is working on improving pricing transparency and simplifying its billing structure, but the effectiveness of these reforms remains to be seen. He anticipates that the company's revenue will continue to grow at a mid-to-high single-digit rate. However, there are signs of weakening demand at the front end of the sales channels and overall customer engagement. The analyst emphasized the need for more concrete data on the commercialization process and large-scale promotion of the company's products before a more optimistic assessment of its stock and growth prospects can be made.