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What's Happening With CRM Stock?
CRMsalesforce(CRM) Forbes·2025-05-29 13:35

Core Insights - Salesforce reported Q1 fiscal 2026 results with sales of 9.83billionandearningspershareof9.83 billion and earnings per share of 2.58, surpassing consensus estimates of 9.75billionand9.75 billion and 2.53 respectively [1] - The company announced the acquisition of Informatica for 8billion,markingitslargestacquisitionsinceSlackin2021[1]−Salesforceraiseditsfull−yearforecastforadjustedearningspershareto8 billion, marking its largest acquisition since Slack in 2021 [1] - Salesforce raised its full-year forecast for adjusted earnings per share to 11.27-11.33andrevenueto11.33 and revenue to 41.0 billion-41.3billion,exceedingmarketexpectations[1]FinancialPerformance−Salesforce′srevenuesgrewby841.3 billion, exceeding market expectations [1] Financial Performance - Salesforce's revenues grew by 8% to 9.8 billion in the latest quarter compared to 9.1 billion a year earlier, while the S&P 500 saw a 4.8% improvement [9] - The company has achieved an average revenue growth rate of 12.7% over the last three years, compared to 5.5% for the S&P 500 [9] - Salesforce's operating income over the previous four quarters was 7.9 billion, with an operating margin of 20.4%, higher than the S&P 500's 13.2% [12] Valuation Metrics - Salesforce has a price-to-sales (P/S) ratio of 7.1, compared to 3.0 for the S&P 500, and a price-to-earnings (P/E) ratio of 27 against the benchmark's 26.4 [9] - The price-to-free cash flow (P/FCF) ratio stands at 20.6, slightly above the S&P 500's 20.5 [9] - At a stock price of 280,Salesforceistradingat7timesitstrailingrevenues[12]FinancialStability−Salesforce′sbalancesheetisconsideredrobust,withadebtof280, Salesforce is trading at 7 times its trailing revenues [12] Financial Stability - Salesforce's balance sheet is considered robust, with a debt of 11 billion and a market capitalization of 265billion,resultinginalowdebt−to−equityratioof4.3265 billion, resulting in a low debt-to-equity ratio of 4.3% compared to 19.9% for the S&P 500 [12] - Cash and cash equivalents amount to 11 billion, constituting 11% of total assets of $99 billion, which is moderate compared to the S&P 500's 13.8% [12] Downturn Resilience - Salesforce stock has shown more severe impacts during downturns compared to the S&P 500, with a decline of 58.6% from its peak in November 2021 to December 2022 [13] - The stock fully rebounded to its pre-crisis high by March 2024, indicating some resilience [13] - Overall, Salesforce's performance across key metrics is rated as very strong, with financial stability categorized as extremely strong [13]