Salesforce is regarded by Bank of America as a top GARP company, with a price objective of $400 and an annual free cash flow increase of 15% due to sales and marketing savings.

Analysts from Bank of America described Salesforce Inc. as the next up-and-coming GARP stock. They noted that the focus of this company on improving the efficiency of sales and marketing is set to drive further margin expansion and profitability over the long term.

Analysts forecast optimistically that improved resource allocation and the instigation of Salesforce's internal AI-powered platform, Agentforce, will boost revenue growth in the low-double digits along with margin improvements in the region of 50-100 basis points permanently. Sales and marketing costs, now account for 29.7% of total revenues while one inspires a Sales and Marketing to Incremental Revenue (SMIR) ratio of 4.2x, well above the industry mean of 2.1x. The company sees cost-saving opportunities through improved account executives' ratios, strategic alliances, and better product packaging.

Although investment in Agentforce and R&D investments would not fully offset the efficiency gains, analysts are projecting a 15% compound annual growth rate (CAGR) in free cash flow over the next five years. By fiscal year 2031, Salesforce's free cash flow would reach $28.2 billion, a margin of 38.8%.

Even though the macroeconomic slowdown caused by tariffs may delay the acceleration of revenue growth until the end of fiscal 2026, analysts expect incremental growth of about 2 percent due to Agentforce and Data Cloud traction towards late fiscal 2025.

Bank of America has reiterated its Buy recommendation on Salesforce with a $400 price target. Tuesday afternoon saw Salesforce shares trade at around $278, demonstrating strong investor sentiment in its ability for future growth.