Salesforce (CRM) AI Stock Analysis

• Market Cap: $274.98B
• Dividend Yield: 0.55%
• Average Volume (3M): 7.48M
• Price to Earnings (P/E): 45.2
• Beta (1Y): 1.47
• Revenue Growth: 8.72%
• EPS Growth: 51.47%
• Country: US
• Employees: 72,682
• Sector: Technology
• Sector Strength: 48
• Industry: Software
• EPS (TTM): 6.36
• Shares Outstanding: 957,000,000
• 10 Day Avg. Volume: 8,821,145
• 30 Day Avg. Volume: 7,478,684
• PEG Ratio: 0.88
• Price to Book (P/B): N/A
• Price to Sales (P/S): 7.54
• Price to Cash Flow (P/CF): 35.40
• P/FCF Ratio: 39.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $380.00
• Price Target Upside: 32.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 41

Salesforce has a strong financial foundation with high profitability and cash flow, supported by robust earnings guidance. However, technical indicators suggest potential short-term challenges, and the high P/E ratio raises concerns about overvaluation. The overall outlook remains positive due to strategic product growth and effective financial management.

Positive Factors

Market Position

Salesforce is the largest vendor in the CRM applications market worldwide, with a market share of 22.1% in 2023.

Product Development

CRM launched its much awaited Agentforce 2.0, an advanced version of its flagship AI product, which comes with improved reasoning and data retrieval capabilities along with an expanded library of pre-built skills and enhanced workflow integrations.

Negative Factors

Growth Potential

There is skepticism about CRM's growth potential, with expectations adjusted to mid-single digits rather than double-digit growth.

Salesforce Business Overview & Revenue Model

Company Description

salesforce.com, inc. engages in the design and development of cloud-based enterprise software for customer relationship management. Its solutions include sales force automation, customer service and support, marketing automation, digital commerce, community management, collaboration, industry-specific solutions, and salesforce platform. The firm also provides guidance, support, training, and advisory services. The company was founded by Marc Russell Benioff, Parker Harris, David Moellenhoff, and Frank Dominguez in February 1999 and is headquartered in San Francisco, CA.

How the Company Makes Money

Salesforce makes money primarily through subscription and support fees for its cloud-based CRM and enterprise applications. The company's revenue model is based on a Software-as-a-Service (SaaS) approach, where customers pay recurring fees for access to its suite of applications, which include Sales Cloud, Service Cloud, Marketing Cloud, and Commerce Cloud, among others. Salesforce also generates revenue from professional services, such as consulting and training, which help clients implement and maximize the value of its software solutions. Key partnerships with technology firms and integrations with other business applications further enhance the company's offerings, contributing to its broad customer base and steady revenue growth.

Salesforce Financial Statement Overview

Summary

Salesforce's financial performance is strong, with high profitability margins and robust cash flow generation. The balance sheet shows low leverage and effective equity use. Revenue growth is steady, indicating a solid financial foundation.

Income Statement

Salesforce demonstrates strong financial performance with a gross profit margin of 77.2% and a net profit margin of 21.4% for the TTM (Trailing-Twelve-Months). The revenue growth rate from the previous year is 8.7%, showcasing a steady upward trajectory. EBIT and EBITDA margins are robust at 19.0% and 18.3%, respectively, indicating efficient operational management and profitability.

Balance Sheet

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.05, reflecting low leverage. Return on equity (ROE) is strong at 13.3%, showing effective use of equity capital to generate profits. The equity ratio stands at 59.4%, suggesting a healthy balance of debt and equity financing.

Cash Flow

Salesforce exhibits excellent cash flow management, with a free cash flow growth rate of 31.0% from the previous year. The operating cash flow to net income ratio is 1.61, indicating strong cash generation relative to net income. Additionally, the free cash flow to net income ratio is 1.53, further highlighting efficient cash management.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
37.90B	34.86B	31.35B	26.49B	21.25B
	Gross Profit
29.25B	26.32B	22.99B	19.47B	15.81B
	EBIT
7.21B	5.01B	1.03B	548.00M	455.00M
	EBITDA
7.21B	9.22B	5.64B	3.85B	3.30B
	Net Income Common Stockholders
6.20B	4.14B	208.00M	1.44B	4.07B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.03B	14.19B	12.51B	10.54B	11.97B
	Total Assets
102.93B	99.82B	98.85B	95.21B	66.30B
	Total Debt
11.39B	13.56B	14.09B	13.98B	6.28B
	Net Debt
2.54B	5.09B	7.07B	8.52B	86.00M
	Total Liabilities
41.76B	40.18B	40.49B	37.08B	24.81B
	Stockholders Equity
61.17B	59.65B	58.36B	58.13B	41.49B
Cash Flow		Free Cash Flow
12.43B	9.50B	6.31B	5.28B	4.09B
	Operating Cash Flow
13.09B	10.23B	7.11B	6.00B	4.80B
	Investing Cash Flow
-3.16B	-1.33B	-1.99B	-14.54B	-3.97B
	Financing Cash Flow
-9.43B	-7.48B	-3.56B	7.84B	1.19B

Salesforce Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 287.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRM, the sentiment is Negative. The current price of 287.34 is below the 20-day moving average (MA) of 317.96, below the 50-day MA of 327.99, and below the 200-day MA of 289.40, indicating a bearish trend. The MACD of -10.91 indicates Positive momentum. The RSI at 26.26 is Positive, neither overbought nor oversold. The STOCH value of 10.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRM.

Salesforce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSFT	81 Outperform	$2.89T	31.30	30.64%	0.81%	15.04%	12.38%
INTU	79 Outperform	$171.61B	57.36	16.92%	0.65%	13.73%	9.93%
ADBE	78 Outperform	$193.98B	35.94	39.42%	―	11.02%	4.96%
SAP	77 Outperform	$324.73B	94.89	6.88%	0.62%	9.55%	-2.28%
ORCL	75 Outperform	$440.44B	38.54	84.57%	0.99%	6.40%	12.83%
CRM	73 Outperform	$274.98B	45.18	10.13%	0.55%	8.72%	51.47%
Sector *	59 Neutral	$22.39B	11.53	-18.05%	2.31%	5.00%	-25.89%

Salesforce Corporate Events

Salesforce Announces Leadership Change with New Appointment

Salesforce announced the appointment of Robin Washington as President and Chief Operating and Financial Officer, effective March 21, 2025, marking a significant leadership change. Washington, who has been integral in Salesforce’s strategic evolution since joining the board in 2013, will lead the company’s new transformation phase focusing on operational excellence and financial strategy. This appointment coincides with the retirement of Brian Millham, a key figure in Salesforce’s growth over the past 25 years, who will transition to an advisory role post-retirement. This leadership transition is poised to steer Salesforce towards its vision of advancing the Agentforce digital labor platform, positioning the company strategically in the evolving industry landscape.