GuruFocus News
08/27/2026 03:51
On August 27, 2026, Salesforce Inc CRM announced its Q2 2027 earnings, showcasing a robust performance with significant year-over-year growth. The company reported:
- GF Value™ verdict: Significantly undervalued at $333.76 vs Current Price $205.62, indicating a 38.4% undervaluation.
- GF Score™: 86/100, reflecting strong overall performance.
- Financial Strength: Ranked 5/10, suggesting a solid balance sheet.
What’s Behind the News?
Salesforce’s Q2 2027 earnings report revealed a revenue of $11.35 billion, marking an 11% increase year-over-year. Subscription and support revenue reached $10.82 billion, a 12% increase that surpassed analyst expectations. The company also reported a GAAP operating profit margin of 20.5% and diluted earnings per share of $4.29, which is a remarkable 119% increase from the previous year. A notable highlight was the strategic investment net gain of approximately $2.613 billion from its stake in Anthropic, which significantly contributed to the earnings.
Salesforce, a leader in enterprise cloud computing solutions, provides customer relationship management CRM technology that connects companies with their customers. With a market capitalization of approximately $168.4 billion, Salesforce operates in the technology sector, specifically within the software industry. The company is currently evolving its platform by integrating artificial intelligence (AI) into its offerings, with AI-related annual recurring revenue nearing $3.9 billion. Following the earnings announcement, Salesforce raised its revenue guidance for the full year to between $46.1 billion and $46.4 billion, reflecting strong organic growth and strategic acquisitions.
Is CRM Overvalued or Undervalued?
According to GuruFocus, Salesforce’s GF Value™ is calculated at $333.76, indicating that the stock is currently undervalued by approximately 38.4%. This significant margin of safety suggests that investors may be able to acquire shares at a price lower than their intrinsic value, presenting a potential opportunity for growth. The current P/E (TTM) ratio stands at 23.8x, which is substantially lower than its 5-year median P/E of 71.71x. This discrepancy further supports the notion that CRM is undervalued in the current market environment. For more insights, visit GF Value™.
What Does CRM’s GF Score™ Tell Us?
The GF Score™ is a comprehensive measure that evaluates a company’s financial strength, profitability, growth potential, valuation, and momentum. Salesforce’s GF Score™ of 86/100 indicates a strong overall performance, with particularly high rankings in profitability and growth. The company’s profitability rank is 9/10, showcasing its ability to generate earnings efficiently, while its growth rank is an impressive 10/10, reflecting robust revenue growth. However, its valuation rank is lower at 4/10, which aligns with the undervaluation indicated by the GF Value™. Below is a summary of Salesforce’s key metrics:
| Metric | Rating |
|---|---|
| GF Score™ | 86 |
| Financial Strength | 5/10 |
| Profitability | 9/10 |
| Growth | 10/10 |
| Valuation | 4/10 |
| Momentum | 4/10 |
Salesforce’s strengths lie in its profitability and growth, which are critical indicators of its operational efficiency and market expansion capabilities. However, the lower valuation rank suggests that while the company is performing well, the market may not yet fully recognize its potential.
For further details, visit the CRM stock page.
What Are Gurus and Insiders Doing with CRM?
Currently, 21 gurus hold shares of Salesforce, with 9 adding to their positions and 11 trimming their holdings in recent quarters. This activity indicates a generally positive sentiment among institutional investors, which can be a strong signal for retail investors. Notably, there has been no insider buying or selling activity reported in the last three months, suggesting that insiders may be confident in the company’s future performance.
What This Means for Investors
In summary, Salesforce’s current valuation, as indicated by the GF Value™, suggests that the stock is significantly undervalued, providing a potential margin of safety for investors. Coupled with a strong GF Score™ and positive guru sentiment, CRM presents an intriguing opportunity for those looking to invest in a leading technology company. For more insights, check out the CRM stock page.
Frequently Asked Questions
What is CRM’s GF Score™?
CRM’s GF Score™ is 86/100, indicating a strong overall performance in terms of financial health, profitability, and growth potential.
CRM is currently undervalued, with a GF Value™ of $333.76 compared to its current price of $205.62, representing a 38.4% undervaluation.
What is CRM’s P/E ratio compared to historical?
CRM’s current P/E (TTM) ratio is 23.8x, significantly lower than its 5-year median P/E of 71.71x, indicating a potential undervaluation in the market.
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.
