salesforce.com (CRM) PT Lowered to $260 at Citi

Citi analyst Tyler Radke lowered the price target on salesforce.com (NYSE: CRM) to $260.00 (from $323.00) while maintaining a Neutral rating.

The analyst comments "Macro headwinds returned with a vengeance with an alarming ~150bps shortfall on adj. cRPO in 1Q25 (worst miss we can recall), revenue missing consensus, and weaker 2Q guidance (cRPO ~150bps below), which sent shares tumbling 16% AH. Though macro was the culprit, GTM changes/execution issues, and guidance that extrapolated the strength in 4Q (budget flush mistaken as sustainable greenshoots/optimism) were also factors. Though Q1 has been consistently weaker for software, magnitude of the miss may suggest more idiosyncratic issues (seat-exposure, down-sells, competition) which could continue to weigh on the business in 2Q+, especially with FY25 revenue now looking aggressive (implying 2H acceleration vs. 2Q). Valuation is undemanding at 20x EPS, 18x EV/FCF(FY25), but with slowing growth, lack of de-risked estimates and more active M&A we are comfortable on the sidelines awaiting improving growth or more evidence of Data Cloud/GenAI momentum/monetization. On lower estimates our PT falls to $260 from $323."

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