Salesforce (CRM) AI Stock Analysis

• Market Cap: $182.52B
• Dividend Yield: 0.63%
• Average Volume (3M): 12.74M
• Price to Earnings (P/E): 25.0
• Beta (1Y): 1.32
• Revenue Growth: 8.41%
• EPS Growth: 22.92%
• Country: US
• Employees: 76,453
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 3.81
• Shares Outstanding: 937,000,000
• 10 Day Avg. Volume: 12,853,759
• 30 Day Avg. Volume: 12,741,284
• PEG Ratio: 1.24
• Price to Book (P/B): 3.41
• Price to Sales (P/S): 4.86
• P/FCF Ratio: 14.00
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 4.45
• Enterprise Value/Gross Profit: 5.73
• Enterprise Value/Ebitda: 14.53
• 1Y Price Target: $275.32
• Price Target Upside: 38.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 40
• EPS Forecast (FY): 13.15
• Revenue Forecast (FY): $46.11B

• Rating: 71 Outperform
• Price Target: $212.00 ▲(6.28% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is supported primarily by strong and improving financial fundamentals (especially free cash flow generation and profitability) and an upbeat earnings outlook with raised long-term targets and significant capital returns. These positives are tempered by clearly weak technicals (price below major moving averages with negative MACD) and only moderate valuation support given the mid‑20s P/E and low dividend yield.

Positive Factors

Free cash flow strength and conversion

Sustained, large free cash flow and very high cash conversion provide durable funding for R&D, acquisitions, and the $50B buyback/dividend program. Strong FCF reduces financing risk, supports capital returns, and gives flexibility to invest in platform scale and AI initiatives over multiple years.

Recurring revenue, backlog and large-deal momentum

Large, growing backlog and RPO give multi-quarter revenue visibility and protect near-term cash flow. Rising big-ticket wins and contract depth indicate strong enterprise penetration and upsell potential, supporting predictable recurring revenue and long-term commercial scale advantages.

Improving margins and profitability

Material margin recovery to mid-teens+ net margins and sustained high gross margins reflect operating leverage as cloud scale and AI products mature. Margin expansion guidance plus disciplined cost management enhance sustainable earnings power and strengthen free cash flow durability.

Negative Factors

Revenue growth deceleration

A marked slowdown in top-line growth reduces the runway for operating leverage and makes meeting elevated long-term targets harder without reacceleration. Slower organic growth increases reliance on upsells, product adoption gains or M&A to sustain multi-year revenue trajectories.

Concentration of recent growth on Agentforce/Data 360 and Informatica

Heavy dependence on a few product areas concentrates execution risk: if adoption, pricing, or cross-sell into legacy clouds lags, overall organic growth could falter. This structural concentration raises sensitivity to product-specific adoption cycles and integration execution over the next several quarters.

Monetization uncertainty and partner competitive risk

Evolving consumption-based monetization (AWUs/tokens) and immature pricing models create long-term margin and revenue predictability risk. Additionally, foundational model providers could shift into competitive roles, pressuring pricing power and complicating sustainable monetization of AI-enabled services.

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 generates revenue primarily through subscription fees for its cloud-based software solutions. Its revenue model is predominantly based on a tiered pricing structure, where customers pay based on the number of users and the level of functionality they require. Key revenue streams include Sales Cloud, Service Cloud, Marketing Cloud, and additional products such as Tableau and MuleSoft, which are acquired technologies that integrate seamlessly with its core offerings. The company also benefits from professional services and training fees related to the deployment and optimization of its software. Significant partnerships with major tech companies, including Google and Amazon, enhance its offerings and expand its market reach, further contributing to its financial success.

Salesforce Financial Statement Overview

Summary

Cash flow is a major strength (free cash flow ~$14.4B in 2026 with ~11.7% growth and ~96% conversion vs net income), profitability has improved materially (net margin ~18% in 2026), and leverage looks manageable with declining debt. Offsets are slowing recent revenue growth and some margin/earnings volatility.

Income Statement

Salesforce shows solid top-line expansion over the period (revenue rising from ~$21.3B in 2021 to ~$41.5B in 2026), but growth has clearly decelerated in the most recent year (2026 revenue growth ~3.0%). Profitability has strengthened meaningfully versus 2022–2023, with net margin improving to ~18.0% in 2026 (vs ~0.7% in 2023) and gross margin holding strong in the mid-to-high 70% range. A notable watch item is margin volatility year-to-year (including a sharp dip in 2023) and a large step-down in EBITDA margin in 2026 versus 2025, suggesting earnings quality/mix is still moving around.

Balance Sheet

The balance sheet looks conservatively levered overall: debt has come down meaningfully from 2023–2024 levels to ~$6.7B in 2026, supported by a large equity base (~$59.1B). Total assets have expanded steadily to ~$112.3B, indicating scale and capacity to invest. The main concern is that returns on equity have been uneven historically (very low in 2022–2023 before improving in 2024–2025), pointing to some inconsistency in how efficiently equity capital has been translated into profits.

Cash Flow

Cash generation is a standout strength. Operating cash flow and free cash flow have climbed strongly over time (free cash flow from ~$4.1B in 2021 to ~$14.4B in 2026), and free cash flow growth remains robust in 2026 (~11.7%). Free cash flow tracks closely to net income (free cash flow is ~96% of net income in 2026), supporting earnings quality. The main weakness is that the provided cash-flow coverage metric is not consistently strong across earlier years, but overall cash conversion and absolute cash flow are very healthy.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	41.52B	37.90B	34.86B	31.35B	26.49B
Gross Profit	32.26B	29.25B	26.32B	22.99B	19.47B
EBITDA	13.15B	11.14B	9.22B	5.64B	3.85B
Net Income	7.46B	6.20B	4.14B	208.00M	1.44B
Balance Sheet
Total Assets	112.31B	102.93B	99.82B	98.85B	95.21B
Cash, Cash Equivalents and Short-Term Investments	9.56B	14.03B	14.19B	12.51B	10.54B
Total Debt	6.74B	11.39B	12.59B	14.09B	13.98B
Total Liabilities	53.16B	41.76B	40.18B	40.49B	37.08B
Stockholders Equity	59.14B	61.17B	59.65B	58.36B	58.13B
Cash Flow
Free Cash Flow	14.40B	12.43B	9.50B	6.31B	5.28B
Operating Cash Flow	15.00B	13.09B	10.23B	7.11B	6.00B
Investing Cash Flow	-8.59B	-3.16B	-1.33B	-1.99B	-14.54B
Financing Cash Flow	-8.08B	-9.43B	-7.48B	-3.56B	7.84B

Salesforce Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 199.47
• 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 199.47 is above the 20-day moving average (MA) of 192.00, below the 50-day MA of 225.68, and below the 200-day MA of 246.61, indicating a neutral trend. The MACD of -9.35 indicates Negative momentum. The RSI at 44.28 is Neutral, neither overbought nor oversold. The STOCH value of 87.16 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
NOW	77 Outperform	$112.98B	64.70	15.49%	―	21.05%	28.67%
CRM	71 Outperform	$182.52B	24.97	12.40%	0.63%	8.41%	22.92%
HUBS	70 Outperform	$13.95B	304.03	2.31%	―	19.21%	75.32%
SAP	69 Neutral	$230.03B	28.42	16.64%	1.07%	11.85%	167.23%
MNDY	67 Neutral	$3.69B	32.42	10.43%	―	28.62%	186.67%
WDAY	66 Neutral	$35.18B	51.77	8.23%	―	13.35%	-60.76%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%