Salesforce Inc (NYSE:CRM, XETRA:FOO) is due to report fiscal first-quarter results on Wednesday afternoon, with Jefferies forecasting an in-line quarter, backed by proprietary partner surveys showing 55% of respondents finished Q1 at plan and 30% came in above it.
The brokerage sees total revenue and current remaining performance obligations growing 12.5% and 14% respectively, with fiscal 2027 earnings per share estimated at $13.14.
The real focus for investors is whether organic revenue can reaccelerate in the second half of the year as Agentforce adoption scales. Bulls are watching for net new annualized order value growth as a signal that double-digit revenue growth can return, potentially as early as fiscal 2028, driven by an Agentforce halo effect across the product portfolio. AI revenue currently accounts for roughly 2% of total revenue.
On margins, Jefferies sees modest upside to its fiscal 2027 operating margin estimate of 34.3%, with more meaningful expansion expected in fiscal 2028.
The bear case centers on seat compression, competitive displacement, and executive attrition. A quarter of survey partners reported seat reductions at renewal, up from 5% in the prior quarter, while layoffs across the broader software industry are fueling concerns about AI pressure on seat-based pricing models. HubSpot's shift to outcome-based pricing has raised questions about whether Salesforce may need to follow.
On the competitive front, 75% of partners identified Anthropic as the biggest AI threat to Salesforce, up from 25% last quarter, with AI-native players, including Sierra, Decagon, and Intercom, winning deals inside Salesforce's customer base. Ongoing executive departures, including the chief product officer and EVP of Agentforce, continue to weigh on sentiment.
Despite the headwinds, Jefferies remains constructive. Salesforce shares are down 32% year-to-date against an 11% decline for the IGV software index, and at 10 times fiscal 2027 free cash flow, the valuation is nearing levels last seen during the 2008 financial crisis trough.
The firm sees upside for patient investors if the company can demonstrate second-half reacceleration and meaningful Agentforce monetization progress.