Salesforce (CRM) AI Stock Analysis

• Market Cap: $257.40B
• Dividend Yield: 0.6%
• Average Volume (3M): 6.94M
• Price to Earnings (P/E): 42.1
• Beta (1Y): 1.34
• Revenue Growth: 8.72%
• EPS Growth: 51.47%
• Country: US
• Employees: 76,453
• Sector: Technology
• Sector Strength: 63
• Industry: Software - Application
• EPS (TTM): 6.36
• Shares Outstanding: 961,000,000
• 10 Day Avg. Volume: 6,582,642
• 30 Day Avg. Volume: 6,941,380
• PEG Ratio: 0.82
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.79
• Price to Cash Flow (P/CF): 17.00
• P/FCF Ratio: 20.70
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 11.31
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $362.35
• Price Target Upside: 35.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 42

Salesforce's strong financial performance and positive earnings call sentiment are key strengths, showcasing robust revenue growth and effective cash flow management. However, technical analysis indicates bearish signals, with the stock trading below major moving averages. Additionally, the high P/E ratio suggests the stock could be overvalued, posing a potential risk. Overall, Salesforce's fundamentals are solid, but caution is warranted due to negative market momentum and valuation concerns.

Positive Factors

AI Integration

Salesforce's focus on Agentforce does make strategic sense based on the transformative potential of AI on the future of application software.

Market Position

Salesforce is the largest CRM vendor worldwide with a market share of 22%, and its subscription model provides strong recurring revenue generation.

Negative Factors

Leadership Stability

The company announced management changes, including the departure of the COO and appointment of a new COFO, which raises questions about leadership stability during a crucial technological phase.

Revenue Challenges

Salesforce's FY26 revenue guidance falls below consensus, presenting a challenge for new business growth in the face of macroeconomic pressures.

Salesforce Business Overview & Revenue Model

Company Description

Salesforce, Inc. provides customer relationship management technology that brings companies and customers together worldwide. Its Customer 360 platform empowers its customers to work together to deliver connected experiences for their customers. The company's service offerings include Sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and relationship intelligence, and deliver quotes, contracts, and invoices; and Service that enables companies to deliver trusted and highly personalized customer service and support at scale. Its service offerings also comprise flexible platform that enables companies of various sizes, locations, and industries to build business apps to bring them closer to their customers with drag-and-drop tools; online learning platform that allows anyone to learn in-demand Salesforce skills; and Slack, a system of engagement. In addition, the company's service offerings include Marketing offering that enables companies to plan, personalize, and optimize one-to-one customer marketing journeys; and Commerce offering, which empowers brands to unify the customer experience across mobile, web, social, and store commerce points. Further, its service offerings comprise Tableau, an end-to-end analytics solution serving various enterprise use cases; and MuleSoft, an integration offering that allows its customers to unlock data across their enterprise. The company provides its service offering for customers in financial services, healthcare and life sciences, manufacturing, and other industries. It also offers professional services; and in-person and online courses to certify its customers and partners on architecting, administering, deploying, and developing its service offerings. The company provides its services through direct sales; and consulting firms, systems integrators, and other partners. Salesforce, Inc. was incorporated in 1999 and is headquartered in San Francisco, California.

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

Overall, Salesforce presents a highly favorable financial profile characterized by consistent revenue growth, strong profitability margins, and prudent balance sheet management. The company's cash flow generation is particularly noteworthy, supporting its operational and strategic initiatives effectively. Potential risks are minimal with low leverage and strong equity positioning.

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
11.14B	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	12.59B	14.09B	13.98B	6.28B
	Net Debt
2.54B	4.12B	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: Neutral
• Last Price: 267.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRM, the sentiment is Neutral. The current price of 267.85 is above the 20-day moving average (MA) of 255.26, below the 50-day MA of 278.05, and below the 200-day MA of 291.80, indicating a neutral trend. The MACD of -6.57 indicates Negative momentum. The RSI at 53.33 is Neutral, neither overbought nor oversold. The STOCH value of 86.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CRM.

Salesforce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INTU	80 Outperform	$164.11B	54.86	17.43%	0.62%	13.73%	9.93%
SAP	79 Outperform	$298.72B	89.42	12.81%	0.62%	9.39%	201.10%
CRM	76 Outperform	$257.40B	42.10	10.26%	0.60%	8.72%	51.47%
WDAY	76 Outperform	$63.71B	122.50	6.15%	―	16.94%	-62.24%
NOW	75 Outperform	$195.67B	128.32	16.86%	―	21.01%	-20.93%
HUBS	72 Outperform	$32.10B	7,173.54	0.29%	―	21.07%	―
Sector *	59 Neutral	$10.73B	10.11	-6.65%	3.02%	7.41%	-11.17%

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.