Salesforce (NYSE:CRM) has recently published its Q1 fiscal 2026 results (with the fiscal year concluding in January), announcing sales of $9.83 billion and earnings per share of $2.58. Both figures exceeded consensus projections of $9.75 billion and $2.53, respectively. Furthermore, Salesforce has recently disclosed its acquisition of Informatica for $8 billion, marking the company’s largest acquisition since Slack ($27 billion) in 2021. In addition, Salesforce has raised its full-year forecast to $11.27-$11.33 in adjusted earnings per share and $41.0 billion-$41.3 billion in revenue, surpassing Street expectations of $11.16 earnings per share and $40.82 billion in revenue.
CRM stock has experienced -17% returns since the start of the year (up to May 28), underperforming the S&P 500 index, which is up 1%. If you are seeking an upside with a steadier performance than an individual stock, consider the High Quality portfolio, which has outperformed the S&P and achieved >91% returns since its inception. Separately, see – NVDA Stock: Solid Q1 But There’s A Downside Risk?
Upon analyzing its recent performance, a critical question arises: Is CRM stock a buy at $280? We affirmatively respond yes, believing its current valuation is appealing. This conclusion is drawn from a comparison of CRM stock’s current valuation with its operational performance in recent years, in addition to its current and past financial health.
Our comprehensive analysis of Salesforce, across key indicators like Growth, Profitability, Financial Stability, and Downturn Resilience, reveals that the company continues to demonstrate very strong operational performance and a robust financial condition. We will elaborate on these findings below.
Moreover, if you prefer an upside with reduced volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
How Does Salesforce’s Valuation Compare to The S&P 500?
Evaluating what you pay per dollar of sales or profit, CRM stock appears reasonable relative to the broader market.
- Salesforce has a price-to-sales (P/S) ratio of 7.1 compared to a figure of 3.0 for the S&P 500
- Furthermore, the company’s price-to-free cash flow (P/FCF) ratio stands at 20.6 in contrast to 20.5 for S&P 500
- Additionally, it has a price-to-earnings (P/E) ratio of 27 against the benchmark’s 26.4
How Have Salesforce’s Revenues Grown Over Recent Years?
Salesforce’s Revenues have experienced significant growth in recent years.
- Salesforce has observed its top line grow at an average rate of 12.7% over the last 3 years (compared to a growth of 5.5% for S&P 500)
- Moreover, its quarterly revenues increased by 8% to $9.8 billion in the latest quarter from $9.1 billion a year earlier (against a 4.8% improvement for S&P 500). Its revenues over the last 12 months stood at $38.6 billion.
How Profitable Is Salesforce?
Salesforce’s profit margins are approximately at the median level for companies within the Trefis coverage universe.
Is Salesforce Financially Stable?
Salesforce’s balance sheet appears robust.
- • Salesforce’s Debt valued $11 billion at the conclusion of the recent quarter, while its market capitalization is $265 billion (as of 5/28/2025). This suggests a very strong Debt-to-Equity Ratio of 4.3% (in comparison to 19.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is preferred]
- Cash (including cash equivalents) constitutes $11 billion of the total $99 billion in Assets for Salesforce. This results in a moderate Cash-to-Assets Ratio of 11% (compared to 13.8% for S&P 500)
How Resilient Is CRM Stock During A Downturn?
CRM stock has experienced more severe impacts than the benchmark S&P 500 index during certain recent downturns. Concerned about the effects of a market crash on CRM stock? Our dashboard – How Low Can Salesforce Stock Go In A Market Crash? – provides a detailed examination of how the stock fared during and after previous market crashes.
Inflation Shock (2022)
- CRM stock experienced a decline of 58.6% from a peak of $309.96 on 8 November 2021 to $128.27 on 16 December 2022, compared to a peak-to-trough drop of 25.4% for the S&P 500
- The stock fully rebounded to its pre-Crisis high by 1 March 2024
- Since then, the stock has risen to a high of $367.87 on 4 December 2024 and is currently valued at approximately $275
COVID-19 Pandemic (2020)
- CRM stock declined 35.7% from a peak of $193.36 on 20 February 2020 to $124.30 on 16 March 2020, while the S&P 500 experienced a peak-to-trough fall of 33.9%
- The stock completely recovered to its pre-Crisis height by 6 July 2020
Global Financial Crisis (2008)
- CRM stock fell 70.5% from a peak of $18.61 on 23 June 2008 to $5.49 on 19 November 2008, compared to a peak-to-trough drop of 56.8% for the S&P 500
- The stock fully rebounded to its pre-Crisis high by 29 December 2009
Bringing It All Together: Implications For CRM Stock
In conclusion, Salesforce’s performance across the described parameters are as follows:
- Growth: Very Strong
- Profitability: Neutral
- Financial Stability: Extremely Strong
- Downturn Resilience: Neutral
- Overall: Very Strong
In summary, Salesforce stock performs admirably across the metrics highlighted. Its appealing valuation further supports that it’s a wise investment at the current price. At $280, CRM is trading at 7 times its trailing revenues, which is lower than its three-year average price-to-sales (P/S) ratio of 9x.
Nonetheless, investors should certainly be mindful of the inherent risks. For instance, the stock’s nearly 60% sharp drop during the most recent economic downturn signifies that CRM is susceptible to challenging market conditions.
While there appears to be potential for upside in CRM stock, the Trefis Reinforced Value (RV) Portfolio has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) delivering strong returns to investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks allowed a flexible approach to maximize gains during positive market conditions while minimizing losses during downturns, as outlined in RV Portfolio performance metrics.
While CRM might have some capacity for growth, it is worthwhile to observe how Salesforce’s Peers perform on critical metrics. Additional valuable comparisons for companies across various sectors can be found at Peer Comparisons.
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