Salesforce (CRM) and SAP (SAP) are both leading software companies competing to gain market share. Both offer strong customer relationship management (CRM) tools, but their strategies, financial profiles, and growth paths differ in key ways. So, which stock is the better buy right now?
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Before answering this question, let’s take a look at their business models.
Key Offerings of CRM and SAP
Salesforce is a leading CRM provider focusing on cloud-based solutions for sales, service, marketing, analytics, and AI. Its growth is fueled by new products like Agentforce and Data Cloud, along with expansion into smaller businesses.
On the other hand, SAP offers a broader range of enterprise software, including ERP, supply chain management, and HR solutions. While it also has CRM features, its strength lies in helping large companies modernize their systems with cloud-based platforms like RISE with SAP and S/4HANA Cloud.
Growth Outlook for 2025
Currently, Salesforce is expected to witness strong earnings growth of 12.7% in 2025, driven by AI and cloud services. It must be mentioned that the company’s Agentforce product reached $100 million in annual recurring revenue within two quarters, which reflects strong demand.
Meanwhile, SAP’s growth is expected to be more moderate, with revenue growth of 3.9% and EPS growth of 4%.
Valuation
Salesforce’s forward P/E ratio is below the technology sector average, suggesting it may be undervalued. CRM currently has an adjusted P/E ratio of 23.69, which reflects a discount of 2.63% from the sector’s median of 24.33.
Meanwhile, SAP’s forward P/E ratio is above industry norms, which means it may be relatively expensive. Its adjusted P/E ratio of 40.88 is nearly 68% above the industry average.
Which is Better, CRM or SAP?
Overall, Salesforce offers higher growth potential and a favorable valuation, while SAP has stable but profitable growth.
Further, using TipRanks’ Stock Comparison Tool, we compared CRM and SAP to see which stock analysts favor. SAP stock carries a Strong Buy rating, while Salesforce is a Moderate Buy. At the same time, CRM stock has upside potential of 33.33% whereas SAP has 18.58% upside.
