GuruFocus News
08/26/2026 15:31
On August 26, 2026, Salesforce Inc (NYSE: CRM) reported its second-quarter financial results, slightly surpassing revenue expectations and highlighting strong growth in AI-driven solutions.
- GF Value™ indicates CRM is trading at $205.62 versus an intrinsic value of $333.76, suggesting it is 38.4% undervalued.
- CRM’s GF Score™ stands at a robust 86/100, reflecting solid overall business quality and growth potential.
- Insider activity shows net selling over the past 12 months, with insiders selling $59.3 million worth of shares versus $27.4 million bought, while 21 premium gurus currently hold CRM, with a slight net trimming trend.
What’s Behind the News?
Salesforce’s Q2 2026 earnings announcement revealed revenues of $11.34 billion, narrowly beating analyst estimates of $11.32 billion. The company’s current Remaining Performance Obligation (cRPO) rose 14% year-over-year on a constant currency basis to $33.5 billion, underscoring strong forward revenue visibility. CEO Marc Benioff emphasized the transformative impact of artificial intelligence within Salesforce’s platform, with annual recurring revenue (ARR) from AI and data solutions approaching $4 billion. The launch of AIforce, which integrates AI capabilities with Salesforce’s data, workflows, and governance, is positioned to accelerate customer success and drive future growth. Robin Washington, President and COO, highlighted the strongest growth in New Next Annualized Operating Value (NNAOV) in four years, signaling potential organic revenue acceleration in the second half of 2026.
Salesforce Inc operates in the technology sector, specializing in software solutions that enable enterprise cloud computing and customer relationship management. With a market capitalization of $168.40 billion, it is a dominant player known for its Customer 360 platform, Service Cloud, Marketing Cloud, Commerce Cloud, and integration tools like MuleSoft. The company’s broad product suite helps clients unify customer data and optimize sales, marketing, service, and commerce operations.
Is CRM Overvalued or Undervalued?
According to GuruFocus’ proprietary GF Value™ model, Salesforce is significantly undervalued at its current price of $205.62 compared to an intrinsic value estimate of $333.76. This 38.4% margin of safety suggests that the stock price does not fully reflect the company’s underlying business strength and growth prospects. The GF Value™ calculation incorporates historical trading multiples, past business growth, and future performance estimates, providing a comprehensive intrinsic valuation benchmark.
Examining valuation multiples, CRM’s trailing twelve months (TTM) price-to-earnings (P/E) ratio stands at 23.8x, which is notably below its 5-year median P/E of 71.71x. This compression in P/E multiples further supports the view that the stock is trading at a discount relative to its historical earnings valuation. Investors looking for a margin of safety combined with exposure to a leading cloud software company may find this valuation attractive. For more on GF Value™, visit GF Value™.
What Does CRM’s GF Score™ Tell Us?
The GF Score™ aggregates multiple dimensions of a company’s financial health, profitability, growth, valuation, and momentum into a single score out of 100, offering a snapshot of overall business quality and investment appeal. Salesforce’s GF Score™ of 86 indicates a strong fundamental profile, particularly excelling in profitability and growth metrics, while showing moderate financial strength and valuation ranks.
| Metric | Rating (out of 10) |
|---|---|
| GF Score™ | 86 |
| Financial Strength | 5 |
| Profitability | 9 |
| Growth | 10 |
| Valuation | 4 |
| Momentum | 4 |
Salesforce’s strongest sub-ranks are in Growth (10/10) and Profitability (9/10), reflecting its consistent revenue and earnings expansion, as well as margin improvements. The moderate Financial Strength score (5/10) aligns with some cautionary signals such as an Altman Z-Score in the grey zone and a debt-to-equity ratio of 1.22, indicating some financial leverage. Valuation and Momentum ranks are lower, consistent with the stock’s recent price volatility and the current discount to intrinsic value. Overall, the GF Score™ portrays a company with excellent growth and profit fundamentals but with room for improvement in balance sheet strength and market sentiment. For more details, see the CRM stock page.
What Are Gurus and Insiders Doing with CRM?
GuruFocus tracks 21 premium gurus holding Salesforce shares. In recent quarters, 9 gurus have added to their positions while 11 have trimmed, indicating a slight net reduction in guru ownership. This nuanced guru activity suggests some cautious rebalancing but overall sustained institutional confidence in CRM’s long-term prospects. Insider activity over the past 12 months shows net selling, with insiders offloading $59.3 million worth of shares against $27.4 million in purchases. While insider selling can be a red flag, it is not uncommon in large-cap tech firms and should be weighed alongside broader ownership trends and company fundamentals.
What This Means for Investors
Salesforce’s current valuation presents a compelling margin of safety, trading approximately 38% below its GF Value™ intrinsic worth. This discount, combined with a strong GF Score™ driven by exceptional growth and profitability, suggests the stock may be undervalued relative to its long-term potential. However, moderate financial strength and mixed insider/guru ownership signals counsel a balanced view. Investors seeking exposure to a leading cloud software innovator with accelerating AI integration might consider CRM’s valuation attractive, but should remain mindful of financial leverage and market momentum. For a deeper dive into Salesforce’s fundamentals and valuation, visit the CRM stock page or explore opportunities through the GuruFocus Stock Screener.
Frequently Asked Questions
What is CRM’s GF Score™?
CRM’s GF Score™ is 86 out of 100, indicating a strong overall financial and operational profile, with particular strengths in growth and profitability.
Based on GF Value™, CRM is undervalued by approximately 38.4%, trading at $205.62 versus an intrinsic value estimate of $333.76.
What is CRM’s P/E ratio compared to historical?
CRM’s trailing P/E ratio is 23.8x, significantly below its 5-year median P/E of 71.71x, suggesting the stock is trading at a discount relative to its historical earnings valuation.
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.
