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Salesforce (CRM)
NYSE:CRM

Salesforce (CRM) AI Stock Analysis

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Salesforce

(NYSE:CRM)

75Outperform
Salesforce's overall stock score reflects a strong financial performance and positive earnings call sentiment, which are key strengths. However, the technical indicators suggest caution due to the current bearish trend. The high P/E ratio indicates a valuation concern, though the company's strategic initiatives in AI and cloud services support future growth potential.
Positive Factors
Acquisition Strategy
Salesforce's acquisition strategy aims to expand its addressable market, with expectations to reach over USD290bn by 2026, enhancing its Customer 360 platform.
Efficiency Improvements
Salesforce has achieved efficiency via a one-time RIF in 2023 (10% headcount) and ongoing efficiency efforts since then.
Market Adoption
Salesforce benefits from the global adoption of digital sales and Agentic AI, which boosts demand and leads to revenue and EBITDA growth above peers.
Negative Factors
Agentforce Monetization
It is believed that Salesforce will not be able to monetize Agentforce at the scale for which investors seem to give the company credit.
Competition
Intensified competition in the global market may lead to downward pressure on Salesforce's product pricing.
Economic Uncertainty
Global economic uncertainty could reduce enterprise spending on CRM applications, affecting Salesforce's revenue.

Salesforce (CRM) vs. S&P 500 (SPY)

Salesforce Business Overview & Revenue Model

Company DescriptionSalesforce, Inc. is a global leader in customer relationship management (CRM) software, offering a suite of cloud-based applications for sales, service, marketing, and more. Founded in 1999 and headquartered in San Francisco, California, the company provides solutions that enhance customer interactions and business efficiencies across various industries, including financial services, healthcare, retail, and communications. Its core products are built on a powerful platform that integrates data, processes, and technologies to improve customer engagement and drive growth for businesses worldwide.
How the Company Makes MoneySalesforce 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 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
90
Very Positive
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
85
Very Positive
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
88
Very Positive
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 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
37.90B34.86B31.35B26.49B21.25B
Gross Profit
29.25B26.32B22.99B19.47B15.81B
EBIT
7.21B5.01B1.03B548.00M455.00M
EBITDA
11.14B9.22B5.64B3.85B3.30B
Net Income Common Stockholders
6.20B4.14B208.00M1.44B4.07B
Balance SheetCash, Cash Equivalents and Short-Term Investments
14.03B14.19B12.51B10.54B11.97B
Total Assets
102.93B99.82B98.85B95.21B66.30B
Total Debt
11.39B13.56B14.09B13.98B6.28B
Net Debt
2.54B5.09B7.07B8.52B86.00M
Total Liabilities
41.76B40.18B40.49B37.08B24.81B
Stockholders Equity
61.17B59.65B58.36B58.13B41.49B
Cash FlowFree Cash Flow
12.43B9.50B6.31B5.28B4.09B
Operating Cash Flow
13.09B10.23B7.11B6.00B4.80B
Investing Cash Flow
-3.16B-1.33B-1.99B-14.54B-3.97B
Financing Cash Flow
-9.43B-7.48B-3.56B7.84B1.19B

Salesforce Technical Analysis

Technical Analysis Sentiment
Negative
Last Price240.76
Price Trends
50DMA
302.66
Negative
100DMA
319.68
Negative
200DMA
292.00
Negative
Market Momentum
MACD
-8.86
Negative
RSI
35.13
Neutral
STOCH
22.74
Neutral
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 240.76 is below the 20-day moving average (MA) of 274.68, below the 50-day MA of 302.66, and below the 200-day MA of 292.00, indicating a bearish trend. The MACD of -8.86 indicates Negative momentum. The RSI at 35.13 is Neutral, neither overbought nor oversold. The STOCH value of 22.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRM.

Salesforce Risk Analysis

Salesforce disclosed 36 risk factors in its most recent earnings report. Salesforce reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Salesforce Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$156.98B52.4717.43%0.69%13.73%9.93%
SASAP
77
Outperform
$295.84B85.757.12%0.70%9.55%-2.28%
75
Outperform
$57.76B111.056.15%16.94%-62.24%
CRCRM
75
Outperform
$231.37B37.8410.26%0.66%8.72%51.47%
NONOW
72
Outperform
$149.53B105.5016.53%22.44%-18.31%
67
Neutral
$26.15B5,844.990.29%21.07%
57
Neutral
$18.54B9.84-14.38%2.71%5.07%-23.65%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CRM
Salesforce
240.76
-59.69
-19.87%
INTU
Intuit
561.53
-79.81
-12.44%
SAP
SAP AG
248.50
58.59
30.85%
WDAY
Workday
217.14
-51.47
-19.16%
NOW
ServiceNow
721.65
-63.95
-8.14%
HUBS
HubSpot
501.50
-168.65
-25.17%

Salesforce Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -21.66% | Next Earnings Date: May 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Salesforce's strong financial performance, particularly its record-breaking revenue and successful deployment of Agentforce, contributing to significant productivity and efficiency gains. However, foreign exchange headwinds and challenges in specific industry segments were noted. Despite these, the overall sentiment remains positive due to the company's robust growth metrics and optimistic outlook for fiscal 2026.
Highlights
Record-Breaking Revenue
Salesforce achieved its first $10 billion quarter, up 8% year-over-year, and $37.9 billion for the fiscal year, up 9% year-over-year.
Agentforce Success
Agentforce has been deployed by thousands of brands, achieving significant productivity and efficiency gains. In just 90 days, 3,000 paying customers were onboarded.
Strong Cash Flow
Operating cash flow reached a record $13.1 billion, up 28% year-over-year, with a free cash flow growth of 31%.
Data Cloud and AI Growth
Data Cloud and AI annual recurring revenue grew nearly 120% year-over-year, reaching $900 million.
RPO Milestone
Remaining Performance Obligation (RPO) surpassed $60 billion for the first time, reaching $63.4 billion, up 11% year-over-year.
Non-GAAP Operating Margin Expansion
Salesforce achieved a non-GAAP operating margin of 33%, up 250 basis points year-over-year.
Lowlights
Foreign Exchange Headwinds
Salesforce experienced a $300 million FX headwind in Q4, impacting growth rates.
Professional Services Business Headwind
The professional services business continues to be a headwind to growth, leaning more on partner ecosystems.
Weaker Performance in Certain Industries
While Health and Life Sciences performed well, Technology, Manufacturing, Automotive, and Energy were more measured.
Company Guidance
In the Salesforce Fourth Quarter and Full Year Fiscal 2025 Results Conference Call, the company provided robust guidance for the upcoming fiscal year. Salesforce reported a record $13.1 billion in operating cash flow for FY25 and set a guidance of approximately $14.5 billion for FY26. Revenue for FY25 was $37.9 billion, marking a 9% year-over-year increase, with Q4 alone reaching $10 billion. They also surpassed $60 billion in Remaining Performance Obligation (RPO). The company expects FY26 revenue to be between $40.5 billion and $40.9 billion, with a 7% to 8% year-over-year increase. Salesforce emphasized growth in their Data Cloud and AI products, which saw 120% year-over-year growth, and Agentforce, which secured over 3,000 paying customers shortly after launch. The company projects a FY26 non-GAAP operating margin of 34%, up from 33% in FY25, and non-GAAP diluted EPS between $11.09 and $11.17. The focus for the coming year will be on the expansion of Agentforce and integrating AI into their offerings, expecting it to drive significant productivity and efficiency gains for customers.

Salesforce Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Salesforce Announces Leadership Change with New Appointment
Neutral
Feb 5, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.