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Salesforce.com (CRM)
:CRM
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Salesforce
(NYSE:CRM)73Outperform
Positive Factors
Market Position
Salesforce is the largest vendor in the CRM applications market worldwide, with a market share of 22.1% in 2023.
Product Development
CRM launched its much awaited Agentforce 2.0, an advanced version of its flagship AI product, which comes with improved reasoning and data retrieval capabilities along with an expanded library of pre-built skills and enhanced workflow integrations.
Negative Factors
Growth Potential
There is skepticism about CRM's growth potential, with expectations adjusted to mid-single digits rather than double-digit growth.
Salesforce (CRM) vs. S&P 500 (SPY)
Market Cap
$274.98B
Dividend Yield0.55%
Average Volume (3M)7.48M
Price to Earnings (P/E)45.2
Beta (1Y)1.47
Revenue Growth8.72%
EPS Growth51.47%
CountryUS
Employees72,682
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)6.36
Shares Outstanding957,000,000
10 Day Avg. Volume8,821,145
30 Day Avg. Volume7,478,684
Financial Highlights & Ratios
PEG Ratio0.88
Price to Book (P/B)N/A
Price to Sales (P/S)7.54
Price to Cash Flow (P/CF)35.40
P/FCF Ratio39.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$380.00Price Target Upside32.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering41
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's financial performance is commendable with strong revenue growth, profitability improvements, and robust cash flow generation. The balance sheet reflects low leverage and strong equity, providing a stable financial foundation. While EBITDA margin shows slight pressure, the overall financial health remains strong, positioning the company well for future growth.Income Statement
Salesforce demonstrates strong revenue growth with a TTM (Trailing-Twelve-Months) increase of 6.7% from the previous annual period and a significant leap from earlier years. The gross profit margin is robust at 76.9%, and net profit margin has improved to 21.1% TTM, reflecting enhanced profitability. EBIT margin has also increased, indicating effective cost management. However, the EBITDA margin shows a slight decline, which warrants monitoring.85
Very Positive
Balance Sheet
The balance sheet is solid with a low debt-to-equity ratio of 0.05 TTM, indicating financial stability. Return on equity has improved to 13.4% TTM, showcasing efficient use of equity. The equity ratio remains strong at 64.0%, reflecting a healthy asset base supported by stockholder equity. The decline in total assets from the previous year suggests potential asset optimization.78
Positive
Cash Flow
Salesforce exhibits excellent cash flow management with a substantial free cash flow growth rate of 25.0% TTM and an operating cash flow to net income ratio of 1.59, indicating strong cash generation relative to profit. The free cash flow to net income ratio is also favorable at 1.51, highlighting effective conversion of earnings into cash.92
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 29.32B | 34.86B | 31.35B | 26.49B | 21.25B | 17.10B | Gross Profit |
| 21.29B | 26.32B | 22.99B | 19.47B | 15.81B | 12.86B | EBIT |
| 75.00M | 5.01B | 1.03B | 548.00M | 455.00M | 297.00M | EBITDA |
| 3.78B | 9.22B | 5.64B | 3.85B | 3.30B | 2.60B | Net Income Common Stockholders |
| 536.00M | 4.14B | 208.00M | 1.44B | 4.07B | 126.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 14.19B | 14.19B | 12.51B | 10.54B | 11.97B | 7.95B | Total Assets |
| 99.82B | 99.82B | 98.85B | 95.21B | 66.30B | 55.13B | Total Debt |
| 13.56B | 13.56B | 14.09B | 13.98B | 6.28B | 5.87B | Net Debt |
| 5.09B | 5.09B | 7.07B | 8.52B | 86.00M | 1.72B | Total Liabilities |
| 40.18B | 40.18B | 40.49B | 37.08B | 24.81B | 21.24B | Stockholders Equity |
| 59.65B | 59.65B | 58.36B | 58.13B | 41.49B | 33.88B |
| Cash Flow | Free Cash Flow | ||||
| 5.68B | 9.50B | 6.31B | 5.28B | 4.09B | 3.69B | Operating Cash Flow |
| 6.40B | 10.23B | 7.11B | 6.00B | 4.80B | 4.33B | Investing Cash Flow |
| -5.27B | -1.33B | -1.99B | -14.54B | -3.97B | -2.98B | Financing Cash Flow |
| -430.00M | -7.48B | -3.56B | 7.84B | 1.19B | 164.00M |
Salesforce Technical Analysis
Negative
287.34
Price Trends
327.99
Negative
323.48
Negative
289.40
Negative
Market Momentum
-10.91
Positive
26.26
Positive
10.81
Positive
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 287.34 is below the 20-day moving average (MA) of 317.96, below the 50-day MA of 327.99, and below the 200-day MA of 289.40, indicating a bearish trend. The MACD of -10.91 indicates Positive momentum. The RSI at 26.26 is Positive, neither overbought nor oversold. The STOCH value of 10.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRM.
Salesforce Risk Analysis
Salesforce disclosed 38 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.89T | 31.30 | 30.64% | 0.80% | 15.04% | 12.38% | |
79 Outperform | $171.61B | 57.36 | 16.92% | 0.63% | 13.73% | 9.93% | |
78 Outperform | $193.98B | 35.94 | 39.42% | ― | 11.02% | 4.96% | |
77 Outperform | $324.73B | 94.89 | 6.88% | 0.62% | 9.55% | -2.28% | |
75 Outperform | $440.44B | 38.54 | 84.57% | 0.99% | 6.40% | 12.83% | |
73 Outperform | $274.98B | 45.18 | 10.13% | 0.55% | 8.72% | 51.47% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
CRM
Salesforce
287.34
-9.75
-3.28%
ADBE
Adobe
446.03
-98.81
-18.14%
INTU
Intuit
598.07
-37.76
-5.94%
MSFT
Microsoft
388.61
-10.99
-2.75%
ORCL
Oracle
157.47
47.72
43.48%
SAP
SAP AG
279.05
93.27
50.20%
Salesforce Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -6.50% | 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.