Salesforce, Inc. (CRM)

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AI: Undervalued

Price checkAt about $193, Salesforce looks inexpensive versus its cash generation, despite meaningful new balance-sheet risk.

At $192.81, Salesforce trades near 24 times management’s FY27 GAAP EPS midpoint of about $7.96. FY26 operating cash flow was $15.0 billion and capital spending was only $0.6 billion, implying roughly $14.4 billion of free cash flow, meaning cash left after necessary equipment spending. Against a roughly $160.7 billion market value, that is close to a 9% free-cash-flow yield. That valuation looks low enough for an Undervalued verdict if cash generation remains durable.

Big pictureRevenue growth is steady, margins are much stronger, but acquisitions and debt now carry more weight.

FY26 revenue reached $41.5 billion, up about 10%, while operating income rose to $8.3 billion from $7.2 billion and just $1.0 billion three years earlier. Q1 FY27 revenue was $11.1 billion, with subscription and support producing $10.6 billion, so recurring contracts cushion economic swings. However, April net debt was about $30.3 billion after new borrowing, and goodwill reached $59.3 billion. The business is more profitable, but its balance sheet has less room for mistakes.

Business strengthRecurring revenue, rising cash flow, and shrinking share count support durability, while stock compensation remains costly.

Operating cash flow climbed from $4.8 billion in FY21 to $15.0 billion in FY26, and Q1 FY27 current remaining performance obligations rose 14% to $33.6 billion, giving visibility into contracted future revenue. Shares outstanding fell from 962 million at FY25 year-end to about 819 million by May 21, 2026, helped by the accelerated buyback. Still, FY26 stock compensation was $3.5 billion, so part of repurchase spending merely offsets employee dilution rather than creating new per-share value.

What could change the storyThe upside needs durable organic growth and AI monetization; the downside is leverage, integration, and software disruption.

The bull case requires organic growth to remain at least mid-single digits, margins to hold, and Agentforce plus Data 360 to convert rapid adoption into lasting cash flow. Q1 Agentforce and Data 360 annual recurring revenue approached $3.4 billion, although Informatica contributed $1.1 billion of that total. The bear case is that AI weakens traditional software pricing while Salesforce keeps buying growth. A $25 billion debt-funded buyback and the planned $3.6 billion Fin acquisition make integration discipline and interest costs unusually important.

$192.81 price considered

AI: News

Q1 growth held upSalesforce beat its own growth expectations and raised full-year revenue guidance while AI-related recurring revenue accelerated.

On May 27, 2026, Salesforce reported Q1 FY27 revenue of $11.1 billion, up 13% year over year, including $444 million from Informatica. Current remaining performance obligations rose 14% to $33.6 billion, while Agentforce and Data 360 annual recurring revenue neared $3.4 billion. Management raised the midpoint of FY27 revenue guidance to $45.9 billion-$46.2 billion. These numbers suggest demand remained resilient, although part of headline growth comes from acquisition rather than the existing business.

Fin deal raises stakesThe planned $3.6 billion Fin purchase deepens Salesforce’s AI bet but adds another integration challenge.

On June 15, 2026, Salesforce agreed to acquire Fin, formerly Intercom, for about $3.6 billion, with closing expected in its fiscal fourth quarter. Fin builds AI customer-service agents, directly supporting Salesforce’s Agentforce strategy. Reuters noted Agentforce annual recurring revenue had reached $1.2 billion in Q1. The deal may strengthen Salesforce’s AI product set, but it also extends a renewed acquisition cycle; subsequent stock weakness cannot be attributed to this announcement alone.

AI fears get challengedA major analyst argued Salesforce’s AI disruption risk was overstated, briefly improving sentiment around the beaten-down shares.

On August 13, 2026, J.P. Morgan resumed Salesforce coverage with an Overweight rating and a $250 price target. MarketWatch reported the shares gained more than 4% that day. The analyst argued AI threats affect only a limited part of Salesforce’s business and highlighted potential upside from its data and agent platforms. This is an analyst opinion, not company guidance, but it matters because the stock’s valuation has been heavily shaped by fears that AI could erode traditional software demand.

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$41.52B	$37.90B	$34.86B	$31.35B	$26.49B	$21.25B	$17.10B	$13.28B	$10.54B	$8.44B	$6.67B	$5.37B	$4.07B	$3.05B	$2.27B	$1.66B	$1.31B	$1.08B	$748.7M
Gross profit	$32.26B	$29.25B	$26.32B	$22.99B	$19.47B	$15.81B	$12.86B	$9.83B	$7.77B	$6.20B	$5.01B	$4.08B	$3.10B	$2.37B	$1.78B	$1.33B	$1.05B	$856.3M	$577.1M
Research & development	$5.99B	$5.49B	$4.91B	$5.05B	$4.46B	$3.60B	$2.77B	$1.89B	$1.55B	$1.21B	$946.3M	$792.9M	$623.8M	$429.5M	$295.3M	$187.9M	$131.9M	$99.5M	$63.8M
Operating expenses	$23.92B	$22.05B	$21.30B	$21.96B	$18.92B	$15.36B	$12.57B	$9.30B	$7.31B	$5.99B	$4.90B	$4.23B	$3.39B	$2.48B	$1.81B	$1.24B	$932.4M	$792.6M	$556.8M
Operating income	$8.33B	$7.21B	$5.01B	$1.03B	$548.0M	$455.0M	$297.0M	$535.0M	$454.0M	$218.0M	$114.9M	−$145.6M	−$286.1M	−$110.7M	−$35.1M	$97.5M	$115.3M	$63.7M	$20.3M
EBITDAderived	$9.53B	$8.21B	$6.11B	$1.93B	$1.23B	$1.03B	$752.0M	$946.0M	$827.0M	$850.0M	$640.7M	$302.7M	$83.3M	$106.1M	$122.2M	$173.2M	$168.4M	$99.7M	$44.5M
Net income	$7.46B	$6.20B	$4.14B	$208.0M	$1.44B	$4.07B	$126.0M	$1.11B	$360.0M	$323.0M	−$47.4M	−$262.7M	−$232.2M	−$270.4M	−$11.6M	$64.5M	$80.7M	$43.4M	$18.4M
Basic EPSper diluted share	$7.85	$6.44	$4.25	$0.21	$1.51	$4.48	$0.15	$1.48	$0.50	$0.47	-$0.07	-$0.42	-$0.39	-$0.48	-$0.02	$0.50	$0.65	$0.36	$0.16
Diluted EPSper diluted share	$7.80	$6.36	$4.20	$0.21	$1.48	$4.38	$0.15	$1.43	$0.49	$0.46	-$0.07	-$0.42	-$0.39	-$0.48	-$0.02	$0.47	$0.63	$0.35	$0.15

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys8$28.88M disclosed value

Sells (SEC code S)742$710.78M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Mar 19, 2026Form 4	ALBER LAURADirector	BuyCommon Stock	2.1K	$194.59	$404.7K	9.5K
Mar 19, 2026Form 4	ALBER LAURADirector	BuyCommon Stock	491	$194.54	$95.5K	7.5K
Mar 18, 2026Form 4	Kirk David BlairDirector	BuyCommon Stock	2.6K	$194.62	$500.2K	13.7K
Jan 14, 2026Form 4	KROES NEELIEDirector	SellCommon Stock	3.9K	$238.70	$929.3K	7.3K
Dec 17, 2025Form 4	Kirk David BlairDirector	BuyCommon Stock	1.9K	$258.64	$500.7K	10.7K

Review ownership filings at SEC.gov ↗

Salesforce, Inc. (CRM)

Financial charts

Financial statements

Insider buys & sells