Table of Contents
- Company profile – the world's leading customer relationship management platform
- Salesforce's outlook for 2025
- Key figures for Salesforce stock from the high-growth investing analysis
- Salesforce stock rating
Digitalization, automation, artificial intelligence, and data networking are key developments affecting all industries, from small and medium-sized businesses to global corporations. Companies today are under increasing pressure to work more efficiently, respond better to customer needs, and make data-driven decisions. This is exactly where Salesforce (ISIN: US79466L3024) comes in with its platform.
As a leading provider of cloud-based CRM solutions and, increasingly, AI-powered applications, Salesforce provides the technological tools to actively shape this transformation. With products such as Data Cloud, Slack, Tableau, and the new AI platform Agentforce, an integrated ecosystem has been created that is driving the digital transformation of companies. A high proportion of recurring revenues, strong customer loyalty, and increasing operational efficiency are all factors that speak in favor of the stock, which is trending significantly upward in the long term. Over twenty years, it has gained more than 5,300 percent.
Source: Salesforce Stock Price
However, given the stock price performance in the current year, investors appear to be increasingly skeptical. A high P/E ratio and slowing growth are just some of the reasons. Insider sales and further acquisitions are causing additional uncertainty. However, there are still a number of factors that speak in favor of the CRM market leader. Although the company is no longer growing at double-digit rates as it did in its early years, it continues to show sustainable growth. Solid financial figures, strong margins, and innovative strength—also thanks to targeted acquisitions such as the recent one involving Informatica—are convincing arguments in its favor.
All of this could make the stock an attractive option for long-term investors who are betting on digitalization and AI, despite the slowdown in growth momentum. The following Salesforce stock analysis reveals more.
Company profile – the world's leading customer relationship management platform
The San Francisco-based company was founded by Marc Benioff, a former top manager at software giant Oracle. He remains CEO of the company and holds just over three percent of Salesforce stock. But now to the business: Salesforce is an international provider of cloud computing solutions. It operates the world's leading platform in the field of customer relationship management (CRM). Its core task is to connect companies with their employees, customers, and products. Currently, over 150,000 companies use Salesforce's software products to develop and scale their businesses. Of particular interest to investors is that the CRM software giant generates the majority of its revenue from recurring software subscription fees. Together with support revenue, these sources account for around 94 percent of sales.
The company's strong growth is largely attributable to acquisitions. Examples of major acquisitions include Slack in 2020 for over $27 billion and Tableau the year before for nearly $16 billion. MuleSoft was also acquired in 2018 for $6.5 billion. The latest acquisition is Informatica, which cost around $8 billion. It is intended to strengthen data management and AI capabilities.
The latest Salesforce quarterly figures from January 2025
Salesforce has made a strong start to fiscal year 2026 (ending January 2026). With an increased revenue forecast, the company highlighted its progress in artificial intelligence (AI) and data processing in particular. The new Agentforce platform and closely integrated products such as Data Cloud, Tableau, and Slack enable companies to work more productively and grow more efficiently. The AI and data segment performed particularly well, with annual revenue now exceeding US$1 billion and growing rapidly. Nearly 60 percent of the quarter's largest deals included AI and Data Cloud components. In addition, the acquisition of Informatica will further expand the offering, creating a leading platform for AI and data management. So, things remain exciting. But now let's look at the specific figures for the first quarter.
Although an 8 percent increase in sales to just under US$10 billion sounds good, the pace of growth is slower than in previous quarters. The chart below shows that the slowdown in growth is slowing down. Is this a sign that the bottom is in sight? Especially since the latest acquisition is not yet included in these figures.
Source: Revenue and revenue growth of Salesforce stock
The results were more encouraging. Net profit rose by 18 percent to US$1.7 billion in the first quarter of 2026.
Salesforce's outlook for 2025
Salesforce is confident about the outlook for the rest of the year. The revenue forecast for the full year has been raised slightly. Salesforce is also benefiting from a weaker US dollar. Almost 40 percent of revenue is generated outside the US.
Specifically, revenue growth of 8 to 9 percent is expected for the second quarter.
This continues the positive trend from the first quarter. Despite ongoing investments in AI and innovation, Salesforce is sticking to its ambitious margin targets and plans to grow operating cash flow by around 10 to 11 percent. Revenue could reach US$41 billion for the 2026 fiscal year. EPS is expected to be between US$7.15 and US$7.21. The non-GAAP forecast, i.e., the adjusted EPS forecast, is between US$11.27 and US$11.33. The planned acquisition of Informatica is not expected to be completed until the next fiscal year and therefore has no impact on the current outlook. However, it should accelerate growth again once completed.
Key figures for Salesforce stock from the high-growth investing analysis
In the high-growth investing analysis, Salesforce continues to impress with high profitability and financial stability. However, revenue growth is continuing to slow, which is having a negative impact on the HGI score. At 11 points, however, this remains high enough for the stock to be among the top performers among growth stocks.
Source: HGI-Score Salesforce
First, the gross margin stands out, coming in at over 77 percent, which is really high. This shows how efficient and scalable the business model is. It's typical for software companies, which have almost no marginal costs for each extra unit they make. The gross margin even went up recently. The EV/sales ratio also scored full points. The ratio of enterprise value to sales is currently 6.6. The debt ratio was similarly good at 0.1, which is very low. Salesforce has a net cash position, meaning that the company has no debt after deducting financial assets. However, there is one flaw in the balance sheet: due to numerous acquisitions, a large amount of goodwill has accumulated. Intangible assets account for more than half of the balance sheet total and are almost as large as total equity.
At least one point was awarded for the value of the PEG ratio, which reached a value of 2.1. The same applies to the Rule of 40 score: at 40.7 percent, it just falls within the threshold value and indicates a balanced relationship between growth and profitability in the HGI analysis.
However, the slowdown in revenue growth is a cause for concern. While Salesforce still grew by over 18 percent in fiscal year 2023, growth is now below nine percent. The HGI analysis therefore awards no points for this category.
Salesforce stock rating
With a P/E ratio of over 40, Salesforce stocks are by no means cheap. Stock-based compensation and goodwill amortization are weighing on net income. In the first quarter of 2026, these two items reduced operating income by almost US$1.2 billion. A look at the last twelve months also highlights this divergence. Free cash flow was US$12.4 billion, while net income was only half as high at US$6.2 billion.
Source: Development of net income and free cash flow of Salesforce stocks
The valuation ratio improves accordingly when free cash flow is taken into account. The EV/FCF ratio is only 20, which may no longer be too expensive given expected revenue growth of up to 9 percent.
Source: Salesforce stock
On the stock market, it's the future that counts. And that looks bright for Salesforce, given the potential of AI and the cloud. A generally clean balance sheet, convincing financial results, a continued strong market position, a moderate valuation, and positive future prospects all speak in favor of the stock.
Conclusion
In conclusion, Salesforce could remain an attractive investment opportunity even at a more mature stage of its development. Although revenue growth has slowed noticeably in recent years, this is not unusual for large, established technology companies, especially as they evolve from pure growth stories to more profitable, sustainable business models.
Salesforce is currently undergoing this transition with great success. The company is increasing its operating margins, generating reliably high free cash flow and, at the same time, further expanding its market position through strategic investments such as the planned acquisition of Informatica.
What I find particularly convincing is that Salesforce is deeply rooted in the most important technological megatrends. With solutions for artificial intelligence, automation, and data management, it offers exactly the tools that companies worldwide need to remain competitive in the digital age. The comprehensively integrated platform on which all Salesforce applications are based not only creates technological efficiency, but also increases customer loyalty and enables cross-selling across different product areas. Even if spectacular growth rates are no longer to be expected in the short term, Salesforce impresses with its quality, innovative strength, and robust business model with a high proportion of recurring revenues. For long-term investors looking to invest in technology companies with sustainable growth, the stock therefore offers a potentially attractive risk/reward profile, especially in the context of advancing digitalization and the increasing use of AI in the corporate world.
Source: Salesforce Forecast
Analysts are also predominantly optimistic. Almost 80 percent of them recommend buying the stock. The average target price for Salesforce stock is 28 percent above the current price. This indicates that the market has positive expectations for the performance of Salesforce stock overall.
The author and/or persons or companies associated with the StocksGuide own or may own stocks in Salesforce.
This post represents an expression of opinion and not investment advice. Please note the legal information.
