Salesforce, Inc. (CRM) Stock Valuation — PE Analysis
Software - Application · NYSE
Current Price
$247.72
PE Ratio (TTM)
22.5x
Intrinsic Value
$304.67
+18.7% margin of safety
COMPETITIVE MOAT
↑Vast Customer Ecosystem
Salesforce's extensive customer base creates significant network effects. New customers benefit from a large pool of trained professionals and integrated third-party applications.
↑High Switching Costs
Organizations deeply integrated with Salesforce's platform face substantial costs and disruption in migrating data and workflows. This lock-in is a key competitive advantage.
↑Data and Scale Advantage
The sheer volume of data processed by Salesforce fuels its AI capabilities and product development. This scale provides a continuous advantage in refining its offerings.
INVESTMENT RISKS
↓Aggressive Share Buybacks
Massive buybacks, while boosting EPS, could signal a lack of compelling organic growth opportunities or a preference for financial engineering over innovation.
↓AI Partnership Uncertainty
The success of the Claude AI partnership remains unproven. Its integration and market reception will be critical for future AI strategy.
↓Technical Chart Weakness
Negative technical indicators suggest potential short-term investor sentiment challenges, which could impact stock performance regardless of underlying fundamentals.
Base case
CRM base case PE valuation
A base case PE valuation for CRM estimates a fair value of about $304.67 per share, against a current price of $247.72. The model assumes 9.8% annual earnings growth, a 21.03x target PE multiple, and a 10% discount rate.
Intrinsic Value
$304.67
Margin of safety
+18.7%
Expected annual return
+4.2%
Base case assumptions: 9.8% annual earnings growth, 21.03x target PE, 10% discount rate, 5 year projection. Data as of 2026-09-11.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CRM PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Salesforce, Inc. respond.
Open PE Calculator for CRMCompany Overview
Salesforce, Inc. is a leading provider of customer relationship management (CRM) solutions, dedicated to connecting businesses and their clientele on a global scale. At its core, the Customer 360 platform empowers organizations to create seamless, integrated experiences for their customers. The company's extensive suite of services encompasses a wide array of functionalities: Sales: Tools designed to manage sales pipelines, track leads, forecast opportunities, extract data-driven insights through analytics, and streamline the creation of quotes, contracts, and invoices. Service: Capabilities enabling companies to deliver highly personalized, trustworthy, and scalable customer support. Platform: A versatile development environment, featuring intuitive drag-and-drop tools, that allows businesses of diverse sizes, locations, and industries to build tailored applications, thereby strengthening customer relationships. Learning: An online educational platform providing accessible training to acquire sought-after Salesforce skills. Slack: A comprehensive system for team collaboration and engagement. Marketing: Solutions for strategizing, personalizing, and optimizing individual customer marketing journeys. Commerce: Offerings that unify customer interactions across various channels, including mobile, web, social media, and physical retail stores. Tableau: A complete analytics solution addressing a broad spectrum of enterprise data analysis needs. MuleSoft: An integration platform designed to unlock and connect data residing across an organization's various systems. Salesforce's offerings cater to numerous sectors, such as financial services, healthcare, life sciences, and manufacturing, among others. Beyond its core products, the company also provides professional services and conducts both in-person and online courses to certify customers and partners in the architecture, administration, deployment, and development of its services. Its solutions are distributed through direct sales channels, as well as a network of consulting firms, systems integrators, and other strategic partners. Established in 1999, Salesforce, Inc. maintains its headquarters in San Francisco, California.
Financial Metrics — CRM PE Stock Valuation Data
PE Ratio (TTM)
22.5x
PEG Ratio
0.39
Earnings Yield
4.76%
ROE (TTM)
20.2%
Revenue/Share (TTM)
$53.58
Dividend Yield
0.69%
Debt/Equity
1.09x
Frequently Asked Questions
What is the PE ratio of CRM?
The trailing twelve-month PE ratio of CRM reflects how much investors pay per dollar of Salesforce, Inc.'s earnings. This metric is most useful when compared to Software - Application peers and the company's own historical range.
Is CRM overvalued based on PE ratio?
CRM's PE of 22.5x combined with a PEG ratio of 0.39 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Software - Application, a DCF analysis may be more appropriate.
How do I value CRM stock using PE ratio?
To value Salesforce, Inc. using PE: (1) Compare the current PE (22.5x) against the Software - Application median to assess relative pricing, (2) check the PEG ratio (0.39) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of CRM?
CRM's PEG ratio is 0.39, calculated by dividing the PE ratio (22.5x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for CRM stock valuation?
PE ratio gives a quick relative read — how CRM is priced versus Software - Application peers. DCF provides an absolute value based on projected free cash flows. For CRM, with a strong ROE of 20.2%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See CRM DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value CRM with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-09-11. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.