Analysts Downgrade Salesforce Forecasts Following Q3 Results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 04 2025
0mins
Should l Buy CRM?
Source: Benzinga
Earnings Report: Salesforce Inc. reported third-quarter revenue of $10.26 billion and adjusted earnings of $3.25 per share, exceeding expectations, while raising its fiscal 2026 revenue guidance to $41.45 billion to $41.55 billion.
Product Performance: The company's Agentforce and Data 360 products contributed significantly to growth, achieving nearly $1.4 billion in annual recurring revenue (ARR) with a 114% year-over-year increase.
Future Projections: For the fourth quarter, Salesforce expects revenue between $11.13 billion and $11.23 billion, with adjusted earnings projected at $3.02 to $3.04 per share, both surpassing analyst estimates.
Analyst Reactions: Following the earnings announcement, several analysts adjusted their price targets for Salesforce, with most maintaining an Outperform rating but lowering their targets, reflecting a cautious outlook.
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Analyst Views on CRM
Wall Street analysts forecast CRM stock price to rise
39 Analyst Rating
29 Buy
9 Hold
1 Sell
Moderate Buy
Current: 198.790
Low
223.00
Averages
326.40
High
405.00
Current: 198.790
Low
223.00
Averages
326.40
High
405.00
About CRM
Salesforce, Inc. is a provider of customer relationship management (CRM) technology. The Company helps organizations of any size reimagine their business for the world of artificial intelligence (AI). With Agentforce, its platform, organizations can bring humans together with AI agents to drive customer success on one deeply unified platform. With the Salesforce platform, it delivers a single source of truth, connecting customer data with integrated AI across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere. Agentforce is a new layer of the Salesforce platform that enables companies to build and deploy AI agents that can respond to inputs, make decisions and take action autonomously across business functions. Agentforce includes a suite of customizable agents for use across sales, service, marketing and commerce. Datablazer is a data-driven innovator, which leverages the Company’s platform to unlock insights and drive decisions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Core Business Resilience: The company reported $41.5 billion in revenue for fiscal 2026, a 10% year-over-year increase, with nearly 95% of revenue coming from subscription and support contracts, ensuring strong visibility into future quarters amid concerns about AI disrupting traditional SaaS models.
- Acquisition and Integration: In November 2025, Salesforce completed an $8 billion acquisition of Informatica, an enterprise AI-powered cloud data management firm, which contributed $399 million to Salesforce's revenue in fiscal 2026, further strengthening its AI ecosystem.
- Shareholder Return Program: Salesforce returned over $14 billion to shareholders in fiscal 2026, representing 99% of its free cash flow, demonstrating a commitment to shareholder value even as its price-to-earnings ratio stands at 25.1, significantly lower than its historical average of 132.06.
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- Capital Return Program: Salesforce returned over $14 billion to shareholders in fiscal 2026, representing 99% of its free cash flow, reflecting a strong commitment to shareholder returns, even as its price-to-earnings ratio stands at 25.1, significantly lower than its three-year historical average of 132.06.
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- Agentforce Performance: Salesforce's Agentforce platform has closed over 29,000 deals in the first 15 months of fiscal 2026, with annual recurring revenue (ARR) growing 169% to $800 million, indicating strong traction in the enterprise AI space despite a 26% drop in stock price.
- Core Business Resilience: The company reported $41.5 billion in revenue for fiscal 2026, a 10% year-over-year increase, with nearly 95% of revenue coming from subscription and support contracts, ensuring strong visibility into future quarters amid concerns about AI disrupting traditional SaaS models.
- Acquisition and Integration: In November 2025, Salesforce completed an $8 billion acquisition of Informatica, an enterprise AI-powered cloud data management firm, which contributed $399 million to Salesforce's revenue in fiscal 2026, further strengthening its AI ecosystem.
- Shareholder Return Program: Salesforce returned over $14 billion to shareholders in fiscal 2026, representing 99% of its free cash flow, demonstrating a commitment to shareholder value even as its price-to-earnings ratio stands at 25.1, significantly lower than its historical average of 132.06.
See More
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- Salesforce Growth Slowdown: Salesforce's non-GAAP operating margin expanded to 34.2% in Q4 2026, yet its organic revenue growth decelerated to approximately 8%, indicating a weakening growth momentum that could impact future profitability.
- ServiceNow Strong Performance: ServiceNow reported subscription revenue of $3.47 billion in Q4, a 21% year-over-year increase, with current RPO climbing 25% to $12.85 billion, signaling robust market demand and significant future growth potential.
- Successful AI Monetization: Salesforce's Agentforce platform achieved $800 million in annual recurring revenue, a 169% year-over-year increase, while ServiceNow's Now Assist annual contract value surpassed $600 million, showcasing both companies' successful application of AI, potentially driving new growth avenues.
- Stock Buyback Plans: ServiceNow announced an additional $5 billion stock repurchase authorization and a $2 billion accelerated buyback, reflecting management's confidence in the company's future growth while potentially enhancing shareholder value.
See More
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- Future Outlook: ServiceNow anticipates Q1 2026 subscription revenue of up to $3.66 billion, implying approximately 21.5% year-over-year growth, contrasting with Salesforce's fiscal 2027 organic growth outlook of only 7% to 8%, indicating a stronger competitive stance for ServiceNow.
- Cash Flow Performance: ServiceNow boasts a staggering 57% free cash flow margin in Q4, showcasing its robust cash generation capabilities, while Salesforce's operating margin improved from 33.1% to 34.2%, yet its overall growth momentum has weakened, impacting its long-term appeal.
- Share Repurchase Plans: ServiceNow announced a $5 billion share repurchase program, further bolstering investor confidence, whereas Salesforce, despite its lower valuation, faces cautious investor sentiment due to its decelerating growth trend.
See More
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- Partner Expansion: Ahead of the upcoming GPU Technology Conference, Nvidia has reached out to major software companies like Alphabet, Salesforce, and Adobe to seek partnerships that will accelerate the development and deployment of AI agents, showcasing its leadership in the AI sector.
- Security and Privacy Assurance: Nvidia will provide additional security and privacy tools for NemoClaw, ensuring enterprise users' safety while using AI agents, a move that will enhance user trust and promote platform adoption.
- Significant Market Potential: Nvidia CEO Jensen Huang noted that the use of AI agents will increase data processing by 1,000 times, highlighting the demand for computational power and providing strong momentum for Nvidia's future growth.
See More
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- Debt Offering Size: Salesforce is planning to issue up to $25 billion in debt in the U.S. bond market to fund its stock buyback program, marking the company's largest-ever note sale and demonstrating a strong commitment to enhancing shareholder returns.
- Buyback Program Context: In February, Salesforce announced a $50 billion stock repurchase program aimed at boosting market confidence through increased shareholder value, with this debt issuance expected to provide essential funding for that initiative.
- Market Participants: Salesforce has mandated JPMorgan Chase, Bank of America, Barclays, Citigroup, and Wells Fargo to arrange fixed-income investor calls, indicating proactive communication and transparency with the market, with bonds potentially being sold as soon as this week.
- Historical Financing: The last time Salesforce accessed the U.S. bond market was in 2021 when it raised $8 billion to fund its acquisition of Slack; this new debt issuance will not only strengthen its capital structure but also provide funding flexibility for future acquisitions and investments.
See More
Salesforce's AI Strategy and Financial Performance Analysis
- Rapid AI Platform Growth: Salesforce's Agentforce platform has closed over 29,000 deals within 15 months of launch, with annual recurring revenue (ARR) growing 169% year-over-year to $800 million, demonstrating the company's strong adaptability in the rapidly evolving AI landscape despite a nearly 26% drop in stock price.
- Core Business Resilience: In fiscal 2026, Salesforce's revenue increased by 10% year-over-year to $41.5 billion, with nearly 95% of revenue coming from subscription and support contracts, ensuring strong visibility into future quarters even as market concerns about AI intensify.
- Capital Return Program: Salesforce returned over $14 billion to shareholders in fiscal 2026, representing 99% of its free cash flow, reflecting a strong commitment to shareholder returns, even as its price-to-earnings ratio stands at 25.1, significantly lower than its three-year historical average of 132.06.
- Acquisition Strengthens Ecosystem: Salesforce's $8 billion acquisition of Informatica in November 2025 contributed $399 million to revenue in fiscal 2026, and combined with the Agentforce platform, it further strengthens the company's AI ecosystem and enhances customer stickiness.
See More
