“Salesforce’s customer diversification, product portfolio breadth, and ratable software-as-a-service model is continuing to gain significant momentum in the field,” he said in a commentary.
That’s happening “as the digital-transformation-spending cycle kicks into its next gear of growth,” Ives said.
“Digital-transformation projects are getting the green light within many enterprises," he said, calling them "a major tailwind for Salesforce, given its stalwart positioning and expanded product footprint.”
Ives has an outperform rating and a $300 price target for Salesforce. The shares recently traded at $224.50, up 0.9%. The target indicates 33% potential upside.
The stock has slipped 14% over the past six months amid questions about its growth potential.
“We are expecting modest upside across the board when the company reports its April results Thursday after the bell, which should be another bullish data point for the software sector and cloud stocks moving into the rest of 2021,” Ives said.
He said Salesforce has plenty of room to grow, both organically and through acquisition.
TheStreet.com Founder Jim Cramer likes Salesforce. “It's the cheapest stock in the group, and I'd buy it,” he said last Tuesday. “I gave it a soft recommendation last night.”
Last Wednesday, Morgan Stanley analyst Keith Weiss upgraded the company to overweight from equal weight, affirming his price target at $270.