Rangan issues one of the more optimistic calls on Salesforce stock (NYSE:CRM) on Wall Street on Thursday.

We’ve discovered that the atmosphere on customer demand at Dreamforce, Salesforce’s major annual developer conference in San Francisco, has been mainly upbeat, despite rising interest rates starting to unsettle the economy and stock market.

Salesforce Executives Adopted a Positive Attitude.

According to Salesforce (NYSE:CRM) co-CEO Bret Taylor on Yahoo Finance Live, “CFOs have a lot of power right now.” “Unlike the previous few years, people are now more concerned about bottom-line growth than merely top-line growth. It’s undoubtedly a more controlled workplace, but technology, in my opinion, is the answer.”

At the conference, Salesforce made a commitment to achieve a 25% operating margin by the year 2025. It’s the first time Salesforce has made a public operating margin target commitment; if achieved, it would represent a significant improvement over the objective of 20.4% for 2022.

In addition, the company anticipates sales of $50 billion by 2025, above the $31 billion Wall Street forecast for this year. Kash Ranga, a software analyst for Goldman Sachs, noticed everything when meeting with Salesforce clients on-site at Dreamforce.

Salesforce Stock Expectations In The Run-Up To The 20th Dreamforce Event

Salesforce Stock, Positive Long-Term Projections

“We believe the potential for Salesforce stock’s (NYSE:CRM) value multiple to increase over time, as was the case with Microsoft, Adobe, AutoDesk, and Intuit, as the firm pushes into various operating levers in their model to index towards this profitability. Even if the business chose to engage in M&A, CFO Amy Weaver’s dedication to this aim gave us hope. As evidence of Salesforce’s ability to carry out these long-term goals, we point to the company’s ability to demonstrate margin increase over the previous 12 months despite the integration of Slack and the reiteration of its FY23 margin targets despite top-line challenges.”

The Goldman analyst continued, “We are heartened by the cadence this guide provides off of its fiscal year 2023 expectation for 20.4% margins, even though the route to this level of profitability is not likely to be linear given necessary go-to-market and product investments.”

Keep an eye on the success of the acquired assets Tableau, Slack, and Mulesoft: “We emphasize Salesforce’s (NYSE:CRM) capacity to fuel innovation and expansion through its purchased assets. Slack, which was purchased for $1.1 billion at a 27x revenue multiple and has since expanded 1.4 times to generate revenues of about $1.5 billion, has more opportunity for growth, in our opinion. With significant new features having just been revealed this week, we think that product adoption and innovation inside the Salesforce (NYSE:CRM) ecosystem are still in their infancy. Likewise, prior purchases like ExactTarget and Demandware support our belief in the expansion potential of acquisitions.”

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