Salesforce (CRM) AI Stock Analysis

• Market Cap: $233.02B
• Dividend Yield: 0.65%
• Average Volume (3M): 7.20M
• Price to Earnings (P/E): 38.8
• Beta (1Y): 1.35
• Revenue Growth: 7.97%
• EPS Growth: 14.85%
• Country: US
• Employees: 76,453
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Application
• EPS (TTM): 2.58
• Shares Outstanding: 956,000,000
• 10 Day Avg. Volume: 8,250,432
• 30 Day Avg. Volume: 7,197,749
• PEG Ratio: 1.03
• Price to Book (P/B): 5.37
• Price to Sales (P/S): 8.67
• P/FCF Ratio: 26.44
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 6.61
• Enterprise Value/Gross Profit: 8.55
• Enterprise Value/Ebitda: 22.60
• 1Y Price Target: $339.60
• Price Target Upside: 35.75% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 40

• Rating: 73 Outperform
• Price Target: $272.00 ▲(8.73% Upside)

Salesforce's strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. While technical analysis indicates bearish momentum, the company's strategic initiatives and robust cash flow position it well for future growth. The high P/E ratio suggests a premium valuation, but the company's growth prospects and operational efficiencies support its current market position.

Positive Factors

AI and Innovation

Salesforce is well positioned to participate in the gen AI trend with a strong cloud portfolio and new innovations.

Growth and Expansion

The company is undertaking an aggressive account executive hiring spree this year to support growth.

Strategic Acquisitions

Salesforce announced a definitive agreement to acquire Informatica for ~$8 billion in cash to bolster its capabilities.

Negative Factors

Core Business Challenges

Pushing Agentforce is coming at the expense of the core business, with bottlenecks limiting efficiency gains promised by Salesforce.

Deal Engagement

A top 5 partner was more cautious, citing a significant decline in the volume of new deal engagements in 2Q along with smaller deal sizes.

Investor Sentiment

Investor sentiment for Salesforce has declined sharply due to decelerating organic growth and mounting competitor pressure.

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 services. The company's revenue model is based on a Software as a Service (SaaS) approach, where customers pay for access to its various CRM solutions on a subscription basis, typically billed annually. Key revenue streams include individual product subscriptions, bundled packages, and add-on services. Additionally, Salesforce earns revenue from professional services, such as consulting, implementation, and training. The company has entered into significant partnerships with other tech firms, such as Google and Amazon Web Services, which enhance its offerings and contribute to customer acquisition. Furthermore, Salesforce's AppExchange marketplace allows third-party developers to create and sell applications that integrate with its platform, generating additional revenue through partner commissions.

Salesforce Financial Statement Overview

Summary

Salesforce exhibits strong financial performance with robust revenue growth, profitability, and cash flow generation. The solid income statement, stable balance sheet, and efficient cash flow management reflect Salesforce's competitive position in the software industry.

Income Statement

Salesforce demonstrated robust revenue growth with a TTM increase of approximately 10% year-over-year. The company maintains strong profitability metrics, with a gross profit margin of 77.3% and a net profit margin of 16.1% for the TTM. The EBIT and EBITDA margins have also shown healthy levels at 19.3% and 29.5% respectively. Overall, Salesforce's income statement reflects strong revenue growth and profitability, positioning it well in the competitive software industry.

Balance Sheet

Salesforce's balance sheet shows a solid equity position with a debt-to-equity ratio of 0.19 and an equity ratio of 61.5% as of TTM. The company's return on equity stands at 10.2%, indicating effective use of shareholders' capital. The balance sheet reflects a stable financial structure, though the slight increase in total debt warrants monitoring.

Cash Flow

The company's cash flow performance is strong, with significant free cash flow growth of approximately 33% over the past year. The operating cash flow to net income ratio stands at 2.15, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 2.04, showcasing efficient conversion of earnings into cash. Overall, Salesforce exhibits healthy cash flow management with substantial free cash flow improvements.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	38.59B	37.90B	34.86B	31.35B	26.49B	21.25B
Gross Profit	29.84B	29.25B	26.32B	22.99B	19.47B	15.81B
EBITDA	11.30B	11.14B	9.22B	5.64B	3.85B	3.30B
Net Income	6.21B	6.20B	4.14B	208.00M	1.44B	4.07B
Balance Sheet
Total Assets	98.61B	102.93B	99.82B	98.85B	95.21B	66.30B
Cash, Cash Equivalents and Short-Term Investments	17.41B	14.03B	14.19B	12.51B	10.54B	11.97B
Total Debt	11.37B	11.39B	12.59B	14.09B	13.98B	6.28B
Total Liabilities	37.94B	41.76B	40.18B	40.49B	37.08B	24.81B
Stockholders Equity	60.67B	61.17B	59.65B	58.36B	58.13B	41.49B
Cash Flow
Free Cash Flow	12.65B	12.43B	9.50B	6.31B	5.28B	4.09B
Operating Cash Flow	13.32B	13.09B	10.23B	7.11B	6.00B	4.80B
Investing Cash Flow	-2.08B	-3.16B	-1.33B	-1.99B	-14.54B	-3.97B
Financing Cash Flow	-10.24B	-9.43B	-7.48B	-3.56B	7.84B	1.19B

Salesforce Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 250.16
• 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 250.16 is above the 20-day moving average (MA) of 244.45, below the 50-day MA of 257.40, and below the 200-day MA of 290.80, indicating a neutral trend. The MACD of -3.16 indicates Negative momentum. The RSI at 50.88 is Neutral, neither overbought nor oversold. The STOCH value of 85.19 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
ADBE	82 Outperform	$150.55B	22.70	52.25%	―	10.69%	40.10%
NOW	79 Outperform	$179.85B	108.83	16.95%	―	21.12%	43.91%
ORCL	76 Outperform	$657.86B	54.22	85.36%	0.76%	8.38%	16.96%
SAP	74 Outperform	$314.81B	44.31	15.34%	0.96%	10.95%	161.61%
CRM	73 Outperform	$233.02B	38.77	10.31%	0.65%	7.97%	14.85%
WDAY	70 Outperform	$59.51B	103.08	6.66%	―	14.21%	-62.56%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%

Salesforce Corporate Events

Salesforce Appoints Amy Chang and David Kirk to Board

On July 9, 2025, Salesforce announced the appointment of Amy Chang and David Kirk to its Board of Directors. These appointments aim to enhance the board’s innovation leadership and technical expertise, particularly in the agentic AI era. Both Chang and Kirk bring significant experience in technology and AI, which is expected to support Salesforce’s strategy and governance, driving shareholder value and societal impact through innovation and sustainable growth.

Salesforce Secures Credit Agreements for Informatica Acquisition

On June 20, 2025, Salesforce entered into two significant credit agreements to support its pending acquisition of Informatica Inc. The 364-Day Credit Agreement allows Salesforce to borrow up to $4 billion, while the Three-Year Credit Agreement permits borrowing up to $2 billion, both on an unsecured basis. These agreements aim to finance part of the acquisition costs and related expenses. The loans are contingent upon certain conditions and are expected to impact Salesforce’s financial operations and strategic positioning in the industry.

Salesforce Stockholders Approve Equity Incentive Plan Amendment

At its 2025 Annual Meeting of Stockholders held on June 5, 2025, Salesforce, Inc. announced that its stockholders approved an amendment and restatement of the company’s 2013 Equity Incentive Plan. This amendment increases the number of shares reserved for issuance by an additional 34 million shares and extends the plan’s termination date to March 27, 2035. The meeting also included the election of directors, ratification of Ernst & Young LLP as the independent auditor for the fiscal year ending January 31, 2026, and an advisory vote on executive compensation. These decisions are expected to impact Salesforce’s operational strategies and shareholder value positively.

Salesforce Announces Acquisition of Informatica for $8 Billion

On May 27, 2025, Salesforce announced its definitive agreement to acquire Informatica for approximately $8 billion. This acquisition aims to enhance Salesforce’s data foundation for deploying AI by integrating Informatica’s data management capabilities with Salesforce’s platform. The merger is expected to create a comprehensive data platform, strengthening Salesforce’s position in the enterprise data market and enabling more effective AI-driven business operations. The transaction is anticipated to close early in Salesforce’s fiscal year 2027, pending regulatory approvals, and is expected to bring financial benefits starting in the second year post-closing.