Salesforce Inc (NYSE:CRM, ETR:FOO) is set to deliver first-quarter revenue in line with guidance, but investors should expect limited upside on remaining performance obligations and conservative comments from management, according to analysts at Jefferies.
The company will hand down its fiscal Q1 earnings for the three months ending in April on Wednesday after markets close.
“Our 24-partner survey indicates that the demand environment has gotten choppy, with 33% seeing sequential pipeline deceleration versus 24% last quarter,” the analysts wrote in a note.
They added that the survey suggests Salesforce’s execution in Q1 was stable, despite a tougher macroeconomic environment and longer deal cycles. “Though deals are taking longer to close, they aren't getting canceled and 2025 expectations remain intact,” the analysts noted.
For Q1, they expect revenue to match guidance in the range of $9.71 billion to $9.76 billion, but are cautious about current remaining performance obligations (CRPO) growth, which faces tougher comparisons in the coming quarters.
The firm sees “little room for upside to consensus estimates of 10% and 6.8% for CRPO and total revenue, respectively.”
Jefferies expects fiscal 2026 guidance to be maintained, but not raised, even if Q1 revenue beats expectations.
“Considering the cautiously optimistic tone from partners and software peers, we expect fiscal year 2026 guidance to be maintained, but do not expect upside on revenue to be flowed through to the full-year guide,” they wrote. “We believe a cautious approach is appropriate given the current macro.”
On the product front, the Agentforce platform is showing promise with wide early adoption, though its new credit-based pricing has caused some confusion.
“Our sense from the floor was that momentum remains solid, with one partner having as many as 70 customers live on Agentforce,” Jefferies said after attending the Agentforce World Tour in NYC. “We view the pricing changes as a step in the right direction since it enables customers to experiment with Agentforce before committing to it.”
The firm highlighted investor concerns that Salesforce may be prioritizing Agentforce growth at the expense of core offerings.
“Our checks have also indicated that Salesforce is encouraging reps to aggressively go after large Agentforce deals, raising the possibility of core products being neglected,” they wrote.
With core Sales and Service Cloud growth decelerating, Jefferies said Salesforce remains one of the slowest-growing large-cap software names.
Despite those concerns, the analysts maintained a ‘Buy’ rating and $375 price target, implying upside of 33% at the time of writing, citing its attractive valuation and margin expansion potential.
Shares of Salesforce traded at $275 on Wednesday afternoon ahead of its earnings report, down 17.5% in the year to date.