Salesforce's Shares Drop On Missed FY Guidance, Analyst Recommends Focus On Bookings

Core Viewpoint - Salesforce Inc's shares experienced a decline following the release of its fourth-quarter results, which were mixed amid a competitive earnings season [1] Group 1: Financial Performance - Salesforce reported fourth-quarter revenue of $10 billion and earnings of $1.75 per share, with total revenue growing by 7.6% year-on-year and 9% in constant currency terms [2] - Current remaining performance obligation (cRPO) grew by 9.4% year-on-year to $30.2 billion, driven by strength in Data Cloud and AI, along with early renewals [3] - Total revenue guidance for fiscal 2026 is projected to be between $40.5 billion and $40.9 billion, indicating a growth rate of 7.4% at the midpoint, which is below the consensus expectation of 9.2% growth [3] Group 2: Analyst Ratings - Needham's analyst Scott Berg maintained a Buy rating with a price target of $400, highlighting the growth in subscription revenue [2] - JPMorgan's analyst Mark Murphy reiterated an Overweight rating with a price target of $380, noting that while total revenue was below expectations in USD terms, it was ahead in constant currency terms [4] - Guggenheim's analyst John DiFucci kept a Sell rating with a price target of $247, indicating that total revenue missed consensus estimates due to foreign exchange headwinds [6] Group 3: Growth Indicators - Management's guidance for cRPO growth in constant currency terms exceeded market expectations, which is significant as cRPO is considered a key leading indicator for Salesforce [5] - The company is targeting a 32% growth in new annual contract value (ACV) for the full year, a level not seen since 2017 [7]