Salesforce (CRM) Shares Surge 12% Following Strong Earnings Report
GuruFocus News
08/26/2026 17:31
On August 26, 2026, Salesforce Inc CRM experienced a remarkable 12% surge in its stock price following the announcement of its impressive earnings, which surpassed Wall Street expectations. The cloud software provider reported adjusted earnings per share of $5.90 and revenue of $11.35 billion, slightly exceeding the anticipated $11.32 billion.
- GF Value™ verdict: Salesforce is currently trading at $205.62, significantly undervalued compared to its GF Value™ of $333.76, representing a 38.4% margin of safety.
- GF Score™: 86/100, indicating strong overall performance.
- Key financial signal: Salesforce’s P/E (TTM) stands at 23.8x, well below its 5-year median P/E of 71.71x.
What’s Behind the News?
The surge in Salesforce’s stock can be attributed to its robust second-quarter earnings report, which highlighted a year-over-year revenue growth of 11% and a staggering 87% increase in net profit, amounting to $3.53 billion. A significant contributor to this performance was the company’s strategic investment in AI startup Anthropic, which yielded a $2.6 billion gain, boosting Anthropic’s valuation to $96.5 billion. Furthermore, Salesforce’s free cash flow increased by 81% to $1.1 billion, surpassing consensus expectations of $643 million. Looking ahead, Salesforce projects adjusted earnings per share between $3.42 and $3.44 for the upcoming third quarter, with revenues expected to range from $11.42 billion to $11.50 billion.
Salesforce operates in the technology sector, specifically within the software industry, providing enterprise cloud computing solutions. With a market capitalization of approximately $168.4 billion, Salesforce is a leader in customer relationship management CRM technology, offering a suite of products designed to connect companies with their customers. Its Customer 360 platform integrates customer data across various systems, enhancing sales, service, marketing, and commerce capabilities.
Is CRM Overvalued or Undervalued?
According to GuruFocus, Salesforce’s GF Value™ is calculated at $333.76, which indicates that the stock is significantly undervalued at its current price of $205.62. This presents a substantial margin of safety of 38.4%, suggesting that investors may have an opportunity to acquire shares at a discount relative to their intrinsic value. Additionally, Salesforce’s P/E (TTM) of 23.8x is markedly lower than its 5-year median P/E of 71.71x, further supporting the notion that the stock is undervalued. For more insights, visit the GF Value™ page.
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 reflects its strong performance across several key metrics, particularly in profitability and growth, where it ranks 9/10 and 10/10, respectively. However, its financial strength is rated lower at 5/10, indicating some areas for improvement.
| 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 exceptional growth and profitability metrics, which are critical indicators of its operational success. However, the lower financial strength rating suggests that investors should monitor the company’s balance sheet and liquidity as it continues to expand. For further details, check out 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 mixed activity among premium gurus indicates a cautious but generally favorable outlook on the stock. Additionally, there has been no recent insider buying or selling activity, suggesting that insiders may be confident in the company’s future prospects.
What This Means for Investors
Given Salesforce’s significantly undervalued status as indicated by its GF Value™ and strong GF Score™, the company presents a compelling opportunity for investors looking for growth in the technology sector. The combination of robust earnings, strategic investments, and favorable guru sentiment further reinforces the positive outlook for Salesforce. For more detailed analysis, visit the CRM stock page.
Frequently Asked Questions
What is CRM’s GF Score™?
CRM’s GF Score™ is 86/100, indicating strong overall performance across various financial metrics.
CRM is currently undervalued, with a GF Value™ of $333.76 compared to its current price of $205.62, representing a 38.4% margin of safety.
What is CRM’s P/E ratio compared to historical?
CRM’s P/E (TTM) ratio is 23.8x, significantly lower than its 5-year median P/E of 71.71x, suggesting that the stock is undervalued relative to its historical performance.
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.
