Salesforce (CRM): Assessing Valuation After Recent Pullback and Ongoing Business Momentum

Salesforce (CRM) shares have pulled back over the past month, with the stock recently closing at $228.15. While some investors may eye the double-digit dip since early spring, the company’s core business trends remain steady.

See our latest analysis for Salesforce.

Although Salesforce has slid 9.3% over the past month and is down 31% year-to-date on a share price basis, the business itself has continued pushing ahead with new partnerships and product enhancements. Momentum has clearly been fading in the short term, but over the past three years, total shareholder return has still been a solid 59%. This highlights Salesforce's long-term staying power, despite the recent reset in expectations.

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With Salesforce trading at a notable discount to analyst price targets and showing strong revenue and net income growth, investors are left wondering if the recent dip is a genuine buying opportunity or if the market is simply pricing in future growth.

Most Popular Narrative: 15% Undervalued

According to the most widely followed narrative, Salesforce's fair value is set at $268.76, noticeably above the last close price of $228.15. This creates a narrative where strong financial performance meets market skepticism.

Salesforce (NYSE: CRM) delivered another strong quarter, proving it can grow revenue while expanding profitability, something investors have demanded for years. For Q2 fiscal 2026 (ended July 31, 2025), revenue climbed 10% year-over-year to $10.2 billion, with subscription and support revenue up 11% to $9.7 billion.

Read the complete narrative.

Curious how this bold price target compares? There is a key financial forecast within the narrative, pointing to expanding margins and steady revenue growth. Which critical metric could be pivotal to the story? See what drives the model behind this fair value call.

Result: Fair Value of $268.76 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, competitive pressure from rivals like Microsoft and tightening enterprise IT budgets could challenge Salesforce, affecting its continued revenue growth and margin expansion.

Find out about the key risks to this Salesforce narrative.

Another View: Market Ratios Send a Mixed Signal

While the narrative suggests Salesforce is undervalued, a look at its price-to-earnings ratio offers a different perspective. At 32.6x, Salesforce trades above the software industry average of 30.8x but below peers averaging 52x. This positions the stock as more expensive than most in its sector, though not the priciest among big names. The fair ratio, a market benchmark our models suggest could be an eventual target, currently sits at 43.7x. Does this gap highlight value yet to be realized, or is it a warning that the price may stall?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Salesforce Narrative

If you see the story unfolding differently, or want to dig into the numbers on your own, you can put together a narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Salesforce.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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