What's Happening With CRM Stock?

Forbes

4 days ago

CHONGQING, CHINA - MAY 25: In this photo illustration, the logo of Salesforce, Inc. is displayed on ... More a smartphone screen, with the latest stock market chart of the company in the background, reflecting investor sentiment and recent trading activity, on May 25, 2025, in Chongqing, China. (Photo Illustration by)
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.
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.
Evaluating what you pay per dollar of sales or profit, CRM stock appears reasonable relative to the broader market.
Salesforce's Revenues have experienced significant growth in recent years.
Salesforce's profit margins are approximately at the median level for companies within the Trefis coverage universe.
Salesforce's balance sheet appears robust.
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.
In conclusion, Salesforce's performance across the described parameters are as follows:
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.