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Salesforce Faces Favorable Second-Quarter Setup With Upside Potential, Oppenheimer Says

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Salesforce Faces Favorable Second-Quarter Setup With Upside Potential, Oppenheimer Says

Salesforce (CRM) faces a favorable setup heading into its fiscal second-quarter results, with upside potential amid robust Agentforce adoption and usage trends, Oppenheimer said Thursday.

The brokerage expects the customer relationship management platform to post pro-forma earnings of $3.26 a share on revenue of about $11.31 billion for the quarter when it reports results Aug. 26. Wall Street is looking for $3.27 and $11.33 billion, respectively, according to Oppenheimer.

"We are comfortable with our estimates, driven by strong net new Agentforce and data cloud (annual recurring revenue) based on partner checks, and likely upside to (second-quarter) consensus estimates, which is a low bar," Oppenheimer analysts Brian Schwartz and Idan Gutkind said in a note to clients.

The brokerage noted mixed field check feedback, as strong Agentforce activity and Federal business were countered by lengthening sales cycles, looming second-half information technology budget constraints, and "soft" small- and medium-sized business conversions.

"There is heightened awareness for Agentforce across the installed-base and partner ecosystem, and increasing usage from the early Agentforce adopters," Schwartz and Gutkind wrote. "The Agentforce cycle is evolving from broad-based testing initiatives to returns justification, which is increasing deal size, but slowing down Agentforce customers ramping deployments to scaled production levels."

Agentforce is Salesforce's artificial intelligence-powered agent platform designed to automate tasks.

Salesforce's second-quarter outlook of 14% current remaining performance obligation growth appears "beatable," according to Oppenheimer. "If management guides 13% to 14% for (third-quarter) CRPO growth, it will support the revenue reacceleration narrative expected in the (second half of 2027) and possibly higher multiples ahead of the investor day next month at the Dreamforce conference," the analysts said.

The brokerage reiterated its outperform rating on the Salesforce stock, with a $250 price target.

The company's shares were up 0.5% in Thursday late-afternoon trade. The stock has lost 22% in value so far this year.

Last week, UBS Securities said Salesforce could temper expectations for an acceleration in second-half revenue amid mixed customer feedback regarding their software spending.

Price: $207.22, Change: $+1.13, Percent Change: +0.55%

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