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Salesforce (CRM)
NYSE:CRM

Salesforce (CRM) AI Stock Analysis

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Salesforce

(NYSE:CRM)

Rating:77Outperform
Price Target:
$307.00
▲(14.65%Upside)
Salesforce's strong financial performance and positive guidance from the earnings call are significant strengths, contributing to a high score. However, technical analysis and valuation present some concerns, with premium pricing and bearish indicators. The strategic acquisition of Informatica and raised revenue forecast underscore confidence in future growth, despite challenges in certain segments and regions.
Positive Factors
Innovation and Growth
Management spoke to various factors across new innovations, pricing & packaging, and bookings dynamics building confidence in better growth ahead.
Product and Service Expansion
With the continued scaling of the GenAI solutions (Agentforce + Data Cloud) now at $1 billion in Annual Recurring Revenue (ARR) and growing well, stability in the core Sales & Service Clouds, with continued tailwinds from Mulesoft, Tableau and Slack should create the foundation to overcome frictions in Marketing and Commerce, and yield stronger growth ahead.
Revenue and Financial Performance
Salesforce announced updated pricing for Enterprise and Unlimited Editions for Sales Cloud, Service Cloud, Field Service, and select Industries, which could drive incremental revenue.
Negative Factors
Economic Environment
Global economic uncertainty may lead to a reduction in enterprise spending on CRM applications.
Growth and Performance Concerns
Growth deceleration across all clouds outside of Platform in the quarter concerned investors.
Market Position and Competition
Concerns around positioning for Agentic Computing, shifting competitive dynamics, uneven performance across the solution portfolio and executive turnover still yielded a broadly cautious tone on the shares.

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

Salesforce Business Overview & Revenue Model

Company DescriptionSalesforce, 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 MoneySalesforce generates revenue primarily through subscriptions and support services related to its cloud-based software. The company operates on a subscription model, where customers pay a recurring fee to access its software offerings. This model ensures a steady and predictable revenue stream. Salesforce also earns revenue from professional services, which include consulting, implementation, and training services aimed at helping customers maximize the value of their Salesforce solutions. Significant partnerships with companies like Amazon Web Services (AWS) and strategic acquisitions, such as Tableau and Slack, have bolstered its offerings and expanded its market reach, contributing further to its revenue.

Salesforce Key Performance Indicators (KPIs)

Any
Any
Total Performance Obligations
Total Performance Obligations
Shows the total value of contracted revenue yet to be recognized, indicating future revenue streams and the strength of Salesforce's sales pipeline.
Chart InsightsSalesforce's Total Performance Obligations have shown a steady upward trend, with notable spikes at the end of each fiscal year. The recent earnings call highlights a robust 13% year-over-year increase in RPO, driven by strong renewal performance. Despite challenges in marketing and commerce, Salesforce's strategic acquisition of Informatica is expected to bolster its AI and data capabilities, potentially enhancing future obligations. The company's commitment to maintaining a strong operating margin and cash flow growth further supports its long-term financial health and strategic positioning.
Data provided by:Main Street Data

Salesforce Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q1-2026)
|
% Change Since: -2.84%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Positive
Salesforce demonstrated strong financial performance with significant growth in revenue, cash flow, and new product adoption, particularly with AgentForce. The acquisition of Informatica is expected to enhance their AI and data capabilities. However, challenges in marketing, commerce, and certain geographic regions present areas for improvement.
Q1-2026 Updates
Positive Updates
Strong Revenue Growth
Salesforce reported $9.83 billion in Q1 revenue, up 8% year over year, with subscription and support revenue growing 9% in constant currency.
Informatica Acquisition
Salesforce announced an $8 billion acquisition of Informatica, expected to close by early fiscal year 2027, aiming to enhance their data and AI capabilities.
AgentForce Success
Salesforce's AgentForce reached over 4,000 paid customers and crossed $100 million in ARR, showing significant adoption and integration across various industries.
Record Operating Cash Flow
Salesforce achieved $6.5 billion in operating cash flow, indicating strong financial health and cash generation.
RPO and CRPO Growth
Remaining Performance Obligation (RPO) was $60.9 billion, up 13% year over year, while Current RPO grew 11% year over year in constant currency.
Negative Updates
Challenges in Marketing and Commerce
Salesforce reported slower growth in the marketing and commerce segments, impacting overall performance.
Measured Performance in Retail and Public Sector
Retail, consumer goods, and public sector segments showed more measured performance, indicating potential challenges in these areas.
Geographic Pockets of Constraint
Some geographic regions, particularly parts of EMEA, experienced constrained growth compared to other areas.
Company Guidance
During the call, Salesforce provided guidance for fiscal year 2026, raising its revenue forecast by $400 million to reach $41.3 billion at the high end of the range, reflecting an 8% to 9% year-over-year growth in nominal terms. The company reported $9.83 billion in Q1 revenue, marking an 8% increase from the previous year, and delivered a 32.3% non-GAAP margin. Salesforce also highlighted its strong operating cash flow of $6.5 billion and a remaining performance obligation (RPO) of $60.9 billion, up 13% year-over-year. The current RPO grew by 11% year-over-year in constant currency, indicating robust renewal performance. Salesforce reiterated its commitment to maintaining a 34% non-GAAP operating margin for the year and projected operating cash flow growth between 10% and 11%. The company emphasized its strategic acquisition of Informatica for $8 billion, expected to close by early fiscal year 2027, and outlined its plan for achieving accretion on non-GAAP operating margin, non-GAAP EPS, and free cash flow by the second year post-close.

Salesforce Financial Statement Overview

Summary
Salesforce exhibits strong financial performance with robust revenue growth, solid profitability metrics, and healthy cash flow generation. The income statement highlights significant revenue and margin improvements, the balance sheet shows a stable structure with manageable leverage, and cash flow statements reflect efficient cash management.
Income Statement
85
Very Positive
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
78
Positive
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
82
Very Positive
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.
BreakdownTTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue38.59B37.90B34.86B31.35B26.49B21.25B
Gross Profit29.84B29.25B26.32B22.99B19.47B15.81B
EBITDA11.30B11.14B9.22B5.64B3.85B3.30B
Net Income6.21B6.20B4.14B208.00M1.44B4.07B
Balance Sheet
Total Assets98.61B102.93B99.82B98.85B95.21B66.30B
Cash, Cash Equivalents and Short-Term Investments17.41B14.03B14.19B12.51B10.54B11.97B
Total Debt11.37B11.39B12.59B14.09B13.98B6.28B
Total Liabilities37.94B41.76B40.18B40.49B37.08B24.81B
Stockholders Equity60.67B61.17B59.65B58.36B58.13B41.49B
Cash Flow
Free Cash Flow12.65B12.43B9.50B6.31B5.28B4.09B
Operating Cash Flow13.32B13.09B10.23B7.11B6.00B4.80B
Investing Cash Flow-2.08B-3.16B-1.33B-1.99B-14.54B-3.97B
Financing Cash Flow-10.24B-9.43B-7.48B-3.56B7.84B1.19B

Salesforce Technical Analysis

Technical Analysis Sentiment
Positive
Last Price267.76
Price Trends
50DMA
268.77
Negative
100DMA
280.51
Negative
200DMA
295.40
Negative
Market Momentum
MACD
-2.09
Negative
RSI
49.84
Neutral
STOCH
61.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRM, the sentiment is Positive. The current price of 267.76 is above the 20-day moving average (MA) of 265.68, below the 50-day MA of 268.77, and below the 200-day MA of 295.40, indicating a neutral trend. The MACD of -2.09 indicates Negative momentum. The RSI at 49.84 is Neutral, neither overbought nor oversold. The STOCH value of 61.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (49)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$211.40B61.7617.84%0.55%14.99%12.89%
SASAP
78
Outperform
$346.02B55.2012.81%0.89%9.39%201.10%
CRCRM
77
Outperform
$259.24B41.2010.31%0.61%7.97%14.85%
NONOW
75
Outperform
$203.09B135.2516.86%21.01%-20.93%
72
Outperform
$63.86B132.085.70%15.38%-67.58%
64
Neutral
$28.29B7,452.21-1.34%19.17%83.20%
49
Neutral
C$2.89B2.48-80.91%2.94%6.72%-18.96%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CRM
Salesforce
267.76
16.78
6.69%
INTU
Intuit
757.86
110.62
17.09%
SAP
SAP AG
293.29
93.80
47.02%
WDAY
Workday
233.46
10.10
4.52%
NOW
ServiceNow
1,005.16
231.03
29.84%
HUBS
HubSpot
543.36
-42.65
-7.28%

Salesforce Corporate Events

Private Placements and FinancingM&A Transactions
Salesforce Secures Credit Agreements for Informatica Acquisition
Neutral
Jun 24, 2025

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.

The most recent analyst rating on (CRM) stock is a Hold with a $309.00 price target. To see the full list of analyst forecasts on Salesforce stock, see the CRM Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
Salesforce Stockholders Approve Equity Incentive Plan Amendment
Positive
Jun 9, 2025

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.

The most recent analyst rating on (CRM) stock is a Hold with a $311.00 price target. To see the full list of analyst forecasts on Salesforce stock, see the CRM Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Salesforce Announces Acquisition of Informatica for $8 Billion
Positive
May 27, 2025

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.

The most recent analyst rating on (CRM) stock is a Hold with a $311.00 price target. To see the full list of analyst forecasts on Salesforce stock, see the CRM Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 25, 2025