Salesforce's Shares Drop On Missed FY Guidance, Analyst Recommends Focus On Bookings

Salesforce (CRM) shares took a tumble on Wednesday after the company reported its fourth-quarter results, missing analysts' revenue guidance for the fiscal year. The stock fell over 17% in extended trading, as investors digested the news. However, one analyst recommends focusing on the company's bookings growth as a positive sign for the future.

Salesforce reported revenue of $9.13 billion for the fiscal first quarter of 2025, up 11% from the year-ago period, but below analysts' expectations. Net income came in at $1.53 billion or $1.56 per share, beating analysts' projections. The company projected second-quarter revenue to be between $9.2 billion and $9.25 billion, below the $9.35 billion analysts expected. Salesforce maintained its previously announced full-year revenue guidance of between $37.7 billion to $38 billion.



Analysts were quick to weigh in on the results. Deutsche Bank analyst Brad Sills maintained a Buy rating and raised his price target to $316.00 from $288.00, citing strength in Data Cloud and AI along with early renewals. Piper Sandler analyst Brent Bracelin maintained a Neutral rating and a $250.00 price target, noting that the company's total revenue came in below expectations in U.S. dollar terms but ahead in constant currency terms.



However, Guggenheim Securities analyst John DiFucci maintained a Sell rating and a $247.00 price target, noting that the company's total revenue of $9.993 billion missed consensus estimates of $10.044 billion, partially driven by incremental FX headwinds. He also pointed out that the company's guidance for the first quarter appears conservative, while its full-year guidance calls for 32% new ACV (annual contract value) growth.

Despite the missed guidance, some analysts remain optimistic about Salesforce's long-term prospects. Scott Berg, an analyst at Needham, reaffirmed a Buy rating and a $400.00 price target, citing strong performance across key metrics and early momentum in Agentforce. Mark Murphy, an analyst at JPMorgan, reiterated an Overweight rating and a $380.00 price target, highlighting encouraging cRPO CC growth and management's cRPO growth guidance in constant currency terms.



In conclusion, Salesforce's shares dropped on missed fiscal year guidance, but analysts remain divided on the company's prospects. While some see the missed guidance as a negative, others focus on the company's bookings growth and long-term potential. Investors should monitor the company's progress and consider the various analyst perspectives when making investment decisions.