CRM DCF Analysis: Intrinsic Value $526 vs Price $259
GuruFocus News
09/08/2026 06:16
On September 08, 2026, we conducted a discounted cash flow (DCF) analysis for Salesforce Inc CRM, which has seen a notable price performance with a 34.5% increase over the past month, despite a year-to-date decline of 1.6%. The current market price stands at $259.23.
- DCF Earnings-based intrinsic value of $526.25 vs price of $259.23 (margin of safety: 50.7%)
- DCF Free Cash Flow (FCF)-based intrinsic value of $525.81 vs price (second opinion)
- GF Score™ of 91/100, indicating high reliability of the DCF inputs
What Is CRM Worth? DCF Earnings-Based Model
The DCF earnings-based model for Salesforce Inc indicates a significant intrinsic value based on projected earnings growth. The model assumes a robust growth rate of 32% over the next ten years, followed by a terminal growth rate of 4% for the subsequent ten years. The discount rate applied is 11%, combining the risk-free rate and equity risk premium.
| Parameter | Value |
|---|---|
| Current EPS (TTM, excl. non-recurring) | $16.84 |
| 10-Year Growth Rate | 32.0% |
| 10-Year Treasury Rate | 4.80% |
| Discount Rate (ceil(Treasury) + 6%) | 11% |
| Terminal Growth Rate | 4% |
The two-stage model breakdown is as follows:
| Stage | Description | Value |
|---|---|---|
| Growth Stage (Years 1-10) | EPS growing at 32.0%, discounted at 11% | $221.63 |
| Terminal Stage (Years 11-20) | 4% terminal growth, discounted at 11% | $304.62 |
| Intrinsic Value | Growth + Terminal | $526.25 |
With the current price at $259.23 compared to the intrinsic value of $526.25, Salesforce Inc is significantly undervalued, presenting a margin of safety of 50.7%. It is important to note that GuruFocus utilizes EPS excluding non-recurring items, as research indicates a stronger correlation between stock prices and earnings than with free cash flow. For further analysis, visit the CRM DCF Calculator.
What Does the Free Cash Flow DCF Say?
The intrinsic value derived from the Free Cash Flow (FCF) DCF model is $525.81, which aligns closely with the earnings-based intrinsic value of $526.25. This agreement between the two models reinforces the conclusion that Salesforce Inc is significantly undervalued, with a margin of safety of 50.7%.
How Does GF Value™ Compare to the DCF Models?
The GF Value™ for Salesforce Inc is calculated at $340.76, providing a third perspective on the valuation. This proprietary measure is derived from historical trading multiples, past business growth, and future performance estimates. All three models—the DCF earnings, DCF FCF, and GF Value™—concur that Salesforce Inc is undervalued, further supporting the investment thesis. For more details, visit the GF Value™ page.
What Does CRM’s GF Score™ Tell Us?
The GF Score™ evaluates a stock’s overall quality based on various factors, including financial strength, profitability, growth potential, and valuation metrics. Salesforce Inc boasts a GF Score™ of 91/100, indicating a strong overall position. Its predictability rank of 3 out of 5 stars suggests that the DCF model’s estimates for this stock are reasonably reliable.
| Metric | Rating |
|---|---|
| GF Score™ | 91/100 |
| Financial Strength | 5/10 |
| Profitability | 9/10 |
| Growth | 10/10 |
| Valuation | 8/10 |
| Momentum | 5/10 |
Key Assumptions and Limitations
It is essential to recognize that DCF models are highly sensitive to the assumptions made regarding growth and discount rates. Stocks that receive lower predictability ratings tend to yield less reliable DCF estimates. The terminal growth rate of 4% is a simplification that may not capture all future dynamics.
What This Means for Investors
In summary, the DCF earnings model, FCF model, and GF Value™ all point towards a consensus that Salesforce Inc is significantly undervalued. The presence of 19 gurus holding the stock, with a balanced activity of adding and trimming positions, coupled with insider net selling of $28.6 million over the past year, adds a layer of complexity to the investment narrative. This suggests caution despite the strong valuation metrics. For a deeper dive into the DCF analysis, check out the CRM DCF Calculator.
Frequently Asked Questions
What is CRM’s intrinsic value based on DCF?
According to the DCF analysis, the earnings-based intrinsic value is $526.25, while the FCF-based intrinsic value is $525.81.
Is CRM overvalued or undervalued?
Both the DCF and GF Value™ analyses indicate that CRM is significantly undervalued.
How reliable is the DCF model for CRM?
The predictability rank of 3 out of 5 stars suggests that the DCF model provides a reasonably reliable estimate for CRM.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Disclosures
I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.
