Salesforce (NYSE:CRM) - Share price, News & Analysis

Q: What is the Fair Price of CRM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CRM ($181.31) is trading below our estimate of [[fair value]] ($330.95)

CRM fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	4/6
Past Performance	1/6
Financial Health	5/6
Dividends	0/6

CRM Stock Overview

Salesforce, Inc. provides customer relationship management technology that brings companies and customers together worldwide.

Rewards

Trading at 45.2% below our estimate of its fair value

Earnings are forecast to grow 40.87% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (3.6%) are lower than last year (19.9%)

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Salesforce Competitors

Adobe

NasdaqGS:ADBE

US$180.1b

Intuit

NasdaqGS:INTU

US$114.2b

Atlassian

NasdaqGS:TEAM

US$51.4b

Synopsys

NasdaqGS:SNPS

US$47.7b

Price History & Performance

Summary of all time highs, changes and price drops for Salesforce
Historical stock prices
Current Share Price	US$181.31
52 Week High	US$311.75
52 Week Low	US$154.55
Beta	1.16
1 Month Change	9.82%
3 Month Change	-18.07%
1 Year Change	-25.87%
3 Year Change	17.69%
5 Year Change	110.58%
Change since IPO	4,116.51%

Recent News & Updates

Jun 22

Salesforce (NYSE:CRM) Seems To Use Debt Quite Sensibly

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Jun 07

Is Salesforce Stock A Buy After Earnings? Consider Capital Allocation And Valuations

Salesforce's Q1 FY 2023 earnings per share, Sales Cloud revenue and operating margin all came in above market expectations, and this resulted in CRM's shares rising by +10% post-results announcement. The increase in the expected earnings per share for CRM in full-year FY 2023 as part of the company's updated management guidance suggests that Salesforce's outlook is good. I rate Salesforce as a Buy after earnings in view of its valuations and the management's recent comments on capital allocation priorities.

Shareholder Returns

	CRM	US Software	US Market
7D	11.1%	8.1%	6.3%
1Y	-25.9%	-20.3%	-18.8%

Return vs Industry: CRM underperformed the US Software industry which returned -17.9% over the past year.

Return vs Market: CRM underperformed the US Market which returned -18.4% over the past year.

Price Volatility

Is CRM's price volatile compared to industry and market?
CRM volatility
CRM Average Weekly Movement	7.7%
Software Industry Average Movement	11.1%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: CRM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: CRM's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1999	73,541	Marc Benioff	https://www.salesforce.com

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.

Salesforce Fundamentals Summary

How do Salesforce's earnings and revenue compare to its market cap?
CRM fundamental statistics
Market Cap	US$180.40b
Earnings (TTM)	US$1.00b
Revenue (TTM)	US$27.94b

179.9x

P/E Ratio

6.5x

P/S Ratio

Is CRM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CRM income statement (TTM)
Revenue	US$27.94b
Cost of Revenue	US$7.52b
Gross Profit	US$20.42b
Other Expenses	US$19.42b
Earnings	US$1.00b

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.01
Gross Margin	73.10%
Net Profit Margin	3.59%
Debt/Equity Ratio	18.0%

How did CRM perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is CRM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CRM?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CRM. This is calculated by dividing CRM's market cap by their current preferred multiple.
What is CRM's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$180.40b

CRM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	6.5x
Enterprise Value/EBITDA	67.7x
PEG Ratio	4.4x

Price to Sales Ratio vs Peers

How does CRM's PS Ratio compare to its peers?

CRM PS Ratio vs Peers

The above table shows the PS ratio for CRM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	12.4x
ADBE Adobe	10.8x	11.8%	US$180.1b
INTU Intuit	8.9x	13.8%	US$114.2b
TEAM Atlassian	19.8x	24.0%	US$51.4b
SNPS Synopsys	10x	11.2%	US$47.7b
CRM Salesforce	6.5x	14.8%	US$180.4b

Forward PS

Price-To-Sales vs Peers: CRM is good value based on its Price-To-Sales Ratio (6.5x) compared to the peer average (12.4x).

Price to Earnings Ratio vs Industry

How does CRM's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Sales vs Industry: CRM is expensive based on its Price-To-Sales Ratio (6.5x) compared to the US Software industry average (4.7x)

Price to Sales Ratio vs Fair Ratio

What is CRM's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CRM PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	6.5x
Fair PS Ratio	18x

Price-To-Sales vs Fair Ratio: CRM is good value based on its Price-To-Sales Ratio (6.5x) compared to the estimated Fair Price-To-Sales Ratio (18x).

Share Price vs Fair Value

What is the Fair Price of CRM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CRM ($181.31) is trading below our estimate of fair value ($330.95)

Significantly Below Fair Value: CRM is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: CRM is poor value based on its PEG Ratio (4.4x)

Discover undervalued companies

Future Growth

How is Salesforce forecast to perform in the next 1 to 3 years based on estimates from 44 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

40.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CRM's forecast earnings growth (40.9% per year) is above the savings rate (1.9%).

Earnings vs Market: CRM's earnings (40.9% per year) are forecast to grow faster than the US market (13.9% per year).

High Growth Earnings: CRM's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CRM's revenue (14.8% per year) is forecast to grow faster than the US market (8.4% per year).

High Growth Revenue: CRM's revenue (14.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CRM's Return on Equity is forecast to be low in 3 years time (9.8%).

Discover growth companies

Past Performance

How has Salesforce performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

37.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CRM has a large one-off gain of $876.0M impacting its April 30 2022 financial results.

Growing Profit Margin: CRM's current net profit margins (3.6%) are lower than last year (19.9%).

Past Earnings Growth Analysis

Earnings Trend: CRM's earnings have grown significantly by 37.4% per year over the past 5 years.

Accelerating Growth: CRM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CRM had negative earnings growth (-77.4%) over the past year, making it difficult to compare to the Software industry average (27.1%).

Return on Equity

High ROE: CRM's Return on Equity (1.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Salesforce's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CRM's short term assets ($20.4B) exceed its short term liabilities ($19.9B).

Long Term Liabilities: CRM's short term assets ($20.4B) exceed its long term liabilities ($14.2B).

Debt to Equity History and Analysis

Debt Level: CRM has more cash than its total debt.

Reducing Debt: CRM's debt to equity ratio has reduced from 22.9% to 18% over the past 5 years.

Debt Coverage: CRM's debt is well covered by operating cash flow (60.8%).

Interest Coverage: CRM's interest payments on its debt are not well covered by EBIT (1x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Salesforce current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate CRM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CRM's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CRM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CRM's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CRM has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure

CEO

Marc Benioff (56 yo)

23.33yrs

Tenure

US$28,602,112

Compensation

Mr. Marc R. Benioff Co-Founded Salesforce.com, Inc. in February 1999 and had been its Chief Executive Officer February 2020 until November 30, 2021 and serves as its Co-Chief Executive Officer since Novemb...

CEO Compensation Analysis

Compensation vs Market: Marc's total compensation ($USD28.60M) is above average for companies of similar size in the US market ($USD13.43M).

Compensation vs Earnings: Marc's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: CRM's management team is considered experienced (2.1 years average tenure).

Board Members

Experienced Board: CRM's board of directors are considered experienced (8.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CRM insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/04/30
Annual Earnings	2022/01/31