Salesforce (NYSE: CRM) stock price plunged strongly in the past couple of weeks amid the tech sector selloff. But, the latest drop in share price is presenting a buying opportunity for the long-term investors in the analyst’s view because the stock is trading well below its all-time high. The shares are also trading significantly below the analyst’s price targets.
Before the latest selloff, the shares of the cloud software application company grew sharply since the beginning of this year amid strong fundamentals and improving financial numbers.
The latest selloff is only due to the broader market decline. Indeed, Salesforce has been experiencing robust demand for its cloud application products. This is evident from CRM’s announcement of creating 12,000 new jobs in the next year, with 4,000 jobs in the next six months.
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The company has recently reported stronger than expected second-quarter results. In addition, the software application company has raised its third-quarter and full-year financial projections amid strong subscription and support sales.
Its second-quarter revenue of $5.1 billion topped analysts’ consensus estimate by $200 million and revenue jumped 27% from the past year period. Its subscription and support sales rose 29% year over year while billing hit $4.63 billion compared to expectations for $4.05 billion.
“It’s humbling to have had one of the best quarters in Salesforce’s history against the backdrop of multiple crises seriously affecting our communities around the world,” says CEO Marc Benioff.
The company expects its full-year revenue to stand around $20.7 to $20.8 billion relative to the previous forecast for $20.0 billion.
Jefferies has provided a price target of $285 with a buy rating. The firm applauded sharp billings growth and cloud adoption trends. Morgan Stanley has set a $275 price target for Salesforce stock amid strong organic and margin growth numbers. Canaccord Genuity has also provided a buy rating with a $270 price target. Salesforce stock is currently trading around $240.