Salesforce (CRM)
Information Technology · $177B market cap · SEC CIK 0001108524
ahead of 88% of the S&P 500 · #10 of 73 in Information Technology
Next reports on Dec 2, 2026, after the close, with analysts expecting $3.47 in earnings per share.
52-week range $146.32 to $269.11. 21% below its 52-week high and 46% above its low.
The case for CRM
- Generated $14.4B of free cash flow in FY2025, 35% of revenue.
- 22% of revenue drops through to net profit.
- Free cash flow of 8.1% of its market value a year: a lot of cash for the price.
- Revenue growing 11.2% year over year.
- Earnings per share up 59.3%.
- Reasonably priced for its growth: 18.3× earnings, where 13% a year of growth plus a 0.9% dividend would justify about 28×.
The case against
- Current liabilities exceed current assets (ratio 0.84).
- Trailed the S&P 500 by 23 points over the past year.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 80 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 68 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 67 |
| Momentumhow the price has behaved lately | 52 |
| Stabilityhow violently it moves, what it owes and what it pays you | 66 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +11.2% |
|---|---|
| Over 5 years | +14.3% a year |
| FY2025 revenue | $41.5B (+10%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2025 free cash flow | $14.4B |
|---|---|
| Of revenue | 35% |
| Of profit | 193% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 77% |
|---|---|
| Operating margin | 19% |
| Net margin, FY24 → FY25 → now | 16.4% → 18.0% → 22.0% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $7.3B |
|---|---|
| Long-term debt | $10.4B |
| Net debt | $3.1B |
| Years to repay | 0.7 yrs |
Valuation
Is the stock price reasonable? Yes, it looks cheap
| P/E | 18.3× |
|---|---|
| Fair P/E for its growth | 28× |
| P/FCF | 12.3× |
| Forward P/E | 14.1× |
| EV / EBITDA | 22.1× |
At 18.3× earnings it trades below the 28× that 13% a year of growth plus a 0.9% dividend would justify. At 12.3× free cash flow it trades well below that same mark.
The financials, five years deep
Pulled from Salesforce's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $41.5B | $37.9B | $34.9B | $31.4B | $26.5B |
| Change on the year | +10% | +9% | +11% | +18% | — |
| Free cash flow | |||||
| Free cash flow | $14.4B | $12.4B | $9.5B | $6.3B | $5.3B |
| Of revenue | 35% | 33% | 27% | 20% | 20% |
| Profit margins | |||||
| Gross margin | 77.7% | 77.2% | 75.5% | 73.3% | 73.5% |
| Operating margin | 20.1% | 19.0% | 14.4% | 3.3% | 2.1% |
| Net margin | 18.0% | 16.4% | 11.9% | 0.7% | 5.5% |
| Debt vs. cash | |||||
| Cash | $7.3B | $8.8B | $8.5B | $7.0B | $5.5B |
| Long-term debt | $10.4B | $8.4B | $8.4B | $9.4B | $10.6B |
| Net cash (debt) | −$3.1B | $415M | $45.0M | −$2.4B | −$5.1B |
What Salesforce says it does
Overview Salesforce, Inc. (“Salesforce,” the “Company,” “we” or “our”) is a global leader in customer relationship management (“CRM”) technology, helping organizations of any size become agentic enterprises. Founded in 1999, we bring humans, agents, applications, and data together on a trusted, unified platform to unlock growth and innovation. Our artificial intelligence (“AI”) powered Agentforce 360 Platform unites our offerings — spanning sales, service, marketing, commerce, collaboration, data management, integration, analytics, IT service, industry verticals and more — on a single, intelligent platform for trusted enterprise execution. We unify and harmonize across systems, applications and devices to create a complete view of customers. With this single source of customer truth powering agents, teams can be more responsive, productive and efficient and deliver AI-powered, personalized and automated experiences across every…
Risk factors CRM lists in its 10-K
- Defects or disruptions in our services could diminish demand for our services and subject us to substantial liability
- Periodic changes to our sales organization can be disruptive and may reduce our rate of growth
- Sales to customers outside the United States expose us to risks inherent in international operations
- We may lose key members of our management team or development and operations personnel, and may be unable to attract and retain employees we need to support our operations and growth
- Any failure in the delivery of high-quality professional and technical support services related to our online applications may adversely affect our relationships with our customers and our financial results
- The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be harmed
- Our efforts to expand our service offerings and to develop and integrate our existing services in order to keep pace with technological developments may not succeed and may reduce our revenue growth rate and harm our business
- Our continued success depends on our ability to maintain and enhance our brands
- We are subject to risks associated with our strategic investments, including partial or complete loss of invested capital. Significant changes in the fair value of this portfolio could negatively impact our financial results
- Social, ethical, and regulatory issues, including the development, deployment, use or capabilities of AI in our offerings, may result in reputational harm, legal liability and increased compliance costs
- The evolving landscape related to environmental, social and governance matters may expose us to risks that could adversely affect our reputation and performance
- Industry-specific regulations and other requirements and standards are evolving and industry-specific laws, regulations, interpretive positions or standards could harm our business
- We have been and may in the future be sued by third parties for various claims, including alleged infringement of proprietary rights
- Any failure to obtain registration or protection of our intellectual property rights could impair our ability to protect our proprietary technology and our brand, causing us to incur significant expenses and harm our business
- We may be subject to risks related to government contracts and related procurement regulations
- Because we generally recognize revenue from subscriptions for our services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results
- If we experience significant fluctuations in our rate of anticipated growth and fail to balance our expenses with our revenue forecasts, our business could be harmed and our stock price could decline
- Unanticipated changes in our effective tax rate and additional tax liabilities and global tax developments may impact our financial results
- We are exposed to fluctuations in currency exchange rates that have in the past and could in the future negatively impact our financial results and cash flows from changes in the value of the U.S. Dollar versus local currencies
- Our debt service obligations, lease commitments and other contractual obligations may adversely affect our financial condition, results of operations and cash flows
- Our quarterly results are likely to fluctuate, which may cause the value of our common stock to decline substantially
- Our stock price is likely to be volatile and could subject us to litigation
- Provisions in our governing documents and Delaware law might discourage, delay or prevent a change of control of the Company or changes in our management and, therefore, depress our stock price
- There can be no assurance that we will continue to declare cash dividends in any particular amounts, or at all
- Volatile and significantly weakened global economic conditions have in the past and may in the future adversely affect our industry, business and results of operations
- Geopolitical crises, natural disasters and other catastrophic events beyond our control have in the past and may in the future materially adversely affect us
- Climate change may have an impact on our business