salesforce(CRM) Zhao Yin Guo Ji·2024-08-31 04:23Investment Rating - Maintain BUY rating with a target price of US$336.50, reflecting a 30.9% upside from the current price of US$257.01 [4][8] Core Insights - Salesforce reported a total revenue growth of 8% YoY to US$9.33 billion in 2QFY25, aligning with consensus estimates, while non-GAAP operating income increased by 16% YoY to US$3.14 billion, exceeding consensus by 6% due to effective expense management [2][3] - cRPO growth reaccelerated to +11% YoY on a constant currency basis, driven by strong multi-cloud large deals and early renewals, easing investor concerns regarding decelerating RPO growth [2][3] - Management anticipates a sustained measured buying environment, guiding total revenue for 3QFY25E to grow by 7% YoY to US$9.31-9.36 billion, while maintaining FY25E revenue guidance of US$37.7-38.0 billion (+8-9% YoY) [2][3] Financial Performance - Revenue projections for FY25E are set at US$37.8 billion, with adjusted net profit expected to reach US$9.7 billion, translating to an adjusted EPS of US$9.94 [3][10] - Non-GAAP operating margin guidance for FY25E has been raised to 32.8%, up from the previous 32.5%, reflecting efficiency gains from disciplined expense control [2][3][7] - The number of paid Data Cloud customers grew by 130% YoY, with AI-related bookings more than doubling QoQ, indicating strong demand for Salesforce's AI offerings [2][3] Segment Performance - Revenue growth by segment in 2QFY25 showed increases of 9% in sales, 10% in service, 9% in platform & other, 6% in marketing & commerce, and 13% in integration & analytics [2][3] - Multi-cloud deals accounted for approximately 80% of new business in 2QFY25, highlighting the importance of multi-cloud adoption as a growth driver [2][3] Valuation - The target price of US$336.50 is based on a 20x FY25E EV/EBITDA, which is at a discount to the sector average of 22x, reflecting Salesforce's earnings growth entering a more mature stage [4][8][9]