CRM DCF Analysis: Intrinsic Value $526 vs Price $238
GuruFocus News
09/21/2026 06:21
On September 21, 2026, we conducted a DCF analysis for Salesforce Inc CRM to evaluate its intrinsic value in the context of its recent price performance. The stock has seen a decline of 9.6% year-to-date, yet it has rebounded by 21.5% over the past month. Here are some key takeaways from our analysis:
- DCF Earnings-based intrinsic value of $526.25 compared to the current price of $237.92, indicating a margin of safety of 54.8%.
- DCF Free Cash Flow-based intrinsic value stands at $525.81, corroborating the earnings-based valuation.
- GF Score™ of 91/100 suggests high reliability of the DCF inputs, reflecting strong financial health and growth potential.
What Is CRM Worth? DCF Earnings-Based Model
To arrive at the intrinsic value of Salesforce Inc, we employed a two-stage DCF model. The first stage considers a high growth rate for the initial ten years, while the second stage reflects a more conservative terminal growth rate. The following table summarizes our key assumptions:
| Parameter | Value |
|---|---|
| Current EPS (TTM, excl. non-recurring) | $8.35 |
| 10-Year Growth Rate | 32.0% |
| 10-Year Treasury Rate | 4.95% |
| Discount Rate (ceil(Treasury) + 6%) | 11% |
| Terminal Growth Rate | 4% |
Our calculation summary for the two-stage model 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 |
The current price of $237.92 versus the intrinsic value of $526.25 indicates that Salesforce Inc is significantly undervalued, with a margin of safety of 54.8%. Notably, GuruFocus utilizes EPS without non-recurring items, as research indicates that stock prices correlate more closely with earnings than with free cash flow. For further details, visit the CRM DCF Calculator.
What Does the Free Cash Flow DCF Say?
The intrinsic value based on the Free Cash Flow (FCF) DCF model is $525.81. This value aligns closely with our earnings-based intrinsic value of $526.25, reinforcing the conclusion that Salesforce Inc is significantly undervalued, with a margin of safety of 54.8%.
How Does GF Value™ Compare to the DCF Models?
The GF Value™ for Salesforce Inc is calculated at $344.30, providing a third perspective on valuation. This proprietary measure is derived from historical trading multiples, past business growth, and future performance estimates. All three models—DCF earnings, DCF FCF, and GF Value™—agree that Salesforce Inc is undervalued, further supporting the investment thesis. For more insights, check out the GF Value™.
What Does CRM’s GF Score™ Tell Us?
The GF Score™ measures a company’s financial strength, profitability, growth potential, valuation, and momentum, offering a comprehensive view of its overall health. Salesforce Inc boasts a GF Score™ of 91/100, indicating strong fundamentals and growth prospects. Its predictability rank is 3 out of 5 stars, suggesting that the DCF model’s reliability is moderate. The following table summarizes key metrics:
| Metric | Rating |
|---|---|
| GF Score™ | 91/100 |
| Financial Strength | 5/10 |
| Profitability | 9/10 |
| Growth | 10/10 |
| Valuation | 8/10 |
| Momentum | 5/10 |
For more information on Salesforce Inc, visit the CRM stock page.
Key Assumptions and Limitations
It is important to note that DCF models are highly sensitive to growth rate and discount rate assumptions. Stocks with lower predictability ratings tend to yield less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not fully capture future performance.
What This Means for Investors
In conclusion, all three valuation models—DCF earnings, DCF FCF, and GF Value™—indicate that Salesforce Inc is significantly undervalued. The consensus among these models suggests a strong investment opportunity. Additionally, the current guru ownership signal shows that 19 gurus hold the stock, with 9 adding and 9 trimming positions in recent quarters, while insiders have been net selling over the past 12 months. This mixed signal may warrant caution for potential investors. For a deeper dive into the analysis, explore the CRM DCF Calculator.
Frequently Asked Questions
What is CRM’s intrinsic value based on DCF?
Answer: earnings-based $526.25, FCF-based $525.81.
Is CRM overvalued or undervalued?
Answer: CRM is significantly undervalued based on both DCF models and GF Value™.
How reliable is the DCF model for CRM?
Answer: The DCF model’s reliability is moderate, with a predictability rank of 3/5 stars.
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.
