10Y annualized return is
very good
at 13.9% per year
CRM has met or exceeded earnings expectations in
most
recent quarters (9/10)
Strong Gross Profit Margin
Strong Net Profit Margin
Low Debt Levels
Adequate Liquidity Ratios
Strong Revenue Growth
High Cash Flow Generation
Innovative Product Offerings
Strong Multi-Cloud Adoption
Significant Market Opportunity
Growth in Agentforce Adoption
Guidance for Continued Growth
High Valuation Ratios
Return on Equity Needs Improvement
Low Cash Ratio
Foreign Exchange Headwinds
Early Adoption Cycle for Agentforce
Salesforce demonstrates strong business quality through impressive revenue growth, high cash flow generation, and innovative product offerings. The company is well-positioned in the market with significant growth prospects, particularly through its new Agentforce product. However, it faces challenges from foreign exchange fluctuations and the early adoption stage of its new offerings, which may impact short-term growth expectations.
Analysis Date: February 26, 2025
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Salesforce, Inc. is a company that helps businesses manage their relationships with customers. They provide tools that allow companies to keep track of sales, offer personalized customer service, and run marketing campaigns. With their platform, businesses can easily create apps and connect with customers across different channels like websites and social media. Overall, Salesforce makes it easier for companies to understand and serve their customers better.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$248.78
Current Market Price: $241.26
IV/P Ratio: 1.03x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
3.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for CRM
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (37.26)
P/B ratio ≤ 1.5 (3.77)
Current ratio ≥ 2.0 (1.06x)
Long-term debt < Net current assets (6.19x)
Margin of safety (3.0%)
CRM does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
10.46%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
77.19%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
16.35%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
CRM's net profit margin of approximately 16.4% reflects solid profitability, indicating effective cost control and a strong business model.
While a return on equity of 10.46% is positive, it may lag behind industry benchmarks, suggesting there may be better investment opportunities available.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.19x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2025
Current Ratio
Current assets divided by current liabilities
1.06x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2025
With a debt-to-equity ratio of 0.19 and debt-to-assets ratio of 0.11, CRM maintains a conservative capital structure, indicating lower financial risk.
The current ratio and quick ratio both around 1.06 suggest that CRM can cover its short-term liabilities comfortably.
A cash ratio of 0.32 indicates that while liquidity is adequate, the company may not have enough cash on hand to cover immediate liabilities, which could be a concern in times of financial strain.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Salesforce reported $37.9 billion in revenue for fiscal year 2025, marking a 9% year-over-year growth. In Q4 alone, revenue reached $10 billion, demonstrating a strong performance across all key metrics.
The company achieved a record operating cash flow of $13.1 billion for fiscal year 2025, reflecting strong cash production capabilities. This is indicative of Salesforce's ability to effectively manage its operations and generate cash.
Salesforce's new products, particularly Agentforce and Data Cloud, are positioned to drive significant revenue growth. The company reported $900 million in ARR from Data Cloud and AI, growing 120% year-over-year, showcasing its strong product innovation.
Salesforce has seen a robust trend in multi-cloud adoption, with customers averaging nearly four clouds. This indicates that businesses are increasingly leveraging Salesforce's diverse offerings to drive efficiency and productivity.
The company is facing challenges due to foreign exchange fluctuations, which impacted revenue guidance for fiscal year 2026. This indicates potential vulnerabilities in revenue growth tied to global market conditions.
Salesforce is poised to capture a large addressable market, with the digital labor revolution projected to be worth between a few trillion to $12 trillion. This positions the company to expand its market share significantly in the coming years.
Agentforce has quickly garnered traction, with over 3,000 paying customers in just 90 days. This rapid adoption reflects strong demand for AI-driven solutions and indicates Salesforce's potential for future revenue growth.
Salesforce expects subscription and support revenue for fiscal year 2026 to grow by approximately 9% year-over-year in constant currency, signaling confidence in sustained demand for its offerings.
While Agentforce shows promise, the adoption cycle is still in its early stages, and the company anticipates a modest revenue contribution from it in fiscal year 2026. This uncertainty could temper short-term growth expectations.