Core Insights - Salesforce, Inc. and Veeva Systems Inc. are prominent players in the cloud customer relationship management market, with Salesforce serving a broad range of industries and Veeva focusing exclusively on the life sciences sector [1][2] Salesforce Overview - Salesforce maintains a dominant position in the CRM market, surpassing competitors like Microsoft, Oracle, and SAP, and is transitioning to a broader enterprise software provider with a focus on AI, data, and collaboration [3][4] - The introduction of Einstein GPT in 2023 has integrated generative AI into Salesforce's platform, enhancing automation, decision-making, and customer experiences [4] - The recent launch of Agentforce, which has achieved $100 million in annualized revenues within two quarters, demonstrates Salesforce's growth momentum, with its Data Cloud also experiencing over 120% year-over-year growth in annual recurring revenues [5] - However, Salesforce is facing a slowdown in sales growth, with a revenue increase of only 7.7% and non-GAAP EPS growth of 5.7% in Q1 of fiscal 2026, attributed to cautious enterprise spending amid economic uncertainties [6][7] Veeva Systems Overview - Veeva Systems adopts a focused strategy, exclusively serving life sciences companies, which allows it to create specialized tools that are difficult to replace [8] - In Q1 of fiscal 2026, Veeva reported a non-GAAP EPS growth of 31.3% and a revenue increase of 16.7%, alongside a robust operating margin of 46.1% [9][11] - Veeva's Vault CRM, tailored for regulatory and healthcare needs, is currently utilized by over 80 clients and is expected to grow to 200 clients by next year, with ongoing expansion into data analytics and AI tools [10][12] - The company is expected to maintain strong demand for its products due to the essential nature of clinical trials and regulatory compliance in the pharmaceutical sector, even during economic downturns [12][13] Comparative Analysis - Veeva Systems is projected to have stronger growth potential, with Zacks Consensus Estimates indicating a revenue growth of 12.7% and EPS growth of 14.6% for fiscal 2026, compared to Salesforce's expected revenue growth of 8.6% and EPS growth of 10.8% [14] - In terms of valuation, Veeva trades at 35.92 times forward earnings, while Salesforce trades at 22.98 times, reflecting Veeva's higher growth momentum justifying its premium [15] - Year-to-date stock performance shows Veeva Systems has risen by 34%, while Salesforce shares have declined by 18.9%, indicating differing investor sentiment towards the two companies [16] Conclusion - Veeva Systems is positioned as the better investment choice currently, with its specialized tools, strong margins, and consistent growth in the life sciences sector, despite a higher valuation compared to Salesforce [19][20]

Key Takeaways CRM's P/E of 23.21 is below the software industry average and cheaper than peers like MSFT, ORCL and SAP. Revenue growth slowed to 7.7% in Q1, with 12.9% EPS growth estimated over five years vs. 27.8% in prior years. Despite setbacks, Salesforce leads in global CRM software and is betting big on AI and strategic acquisitions.Salesforce, Inc. (CRM) is currently trading at an attractive valuation, with its forward 12-month price-to-earnings (P/E) ratio at 23.2, which is lower than the Zacks Co ...

Core Viewpoint - Salesforce is positioned as a stronger investment option compared to Adobe, driven by its focus on AI, unified platform strategy, and favorable earnings outlook [19]. Salesforce Overview - Salesforce dominates the customer relationship management market, maintaining the largest share according to Gartner [2]. - The company has expanded its platform through acquisitions, aiming to become a broader enterprise software provider focused on AI, data, and collaboration [3]. - AI is central to Salesforce's growth strategy, with the introduction of Einstein GPT in 2023 to enhance automation and customer experiences [4]. - The launch of Agentforce has generated $100 million in annualized revenues within two quarters, with over 4,000 customers utilizing it [5]. - Salesforce's annual recurring revenue (ARR) from Data Cloud has grown over 120% year over year [5]. - Despite an 8% year-over-year revenue growth in Q1 fiscal 2026, which is slower than previous years, adjusted EPS rose 6%, indicating operational soundness [6]. Adobe Overview - Adobe reported a 10% revenue increase to $5.71 billion in Q1 fiscal 2025, with non-GAAP EPS growing 13.4% to $5.08 [7]. - The company leads in creative software, with AI contributing significantly to growth, adding over $125 million in ARR last quarter [8]. - Adobe is expanding its AI offerings with tools like GenStudio and Firefly Services, aimed at enhancing marketing efficiency [9]. - The company plans to monetize Firefly through tiered pricing within Creative Cloud and is increasing sales efforts to various sectors [10]. - However, Adobe's second-quarter guidance indicates potential margin pressure, with expected non-GAAP EPS between $4.95 and $5.00, down from Q1 [11]. Earnings Estimates Comparison - Salesforce's earnings estimates have remained stable over the past 60 days, indicating confidence in its earnings stability [12]. - In contrast, Adobe's earnings estimates have been lowered, raising concerns about near-term profitability [12]. - Long-term earnings growth projections show Salesforce with a CAGR of 12.7%, slightly better than Adobe's 12.4% [14]. Price Performance and Valuation - Over the past year, Salesforce stock has increased by 26.7%, while Adobe shares have decreased by 7.5%, reflecting stronger investor confidence in Salesforce [16]. - From a valuation perspective, Salesforce trades at 6.32 times forward sales, compared to Adobe's 7.17 times, suggesting more upside potential for Salesforce [17].

Core Viewpoint - Salesforce is expected to report strong first-quarter fiscal 2026 results, with projected revenues between $9.71 billion and $9.76 billion, indicating a 6.6% year-over-year increase [1][5] Revenue and Earnings Estimates - Total revenue estimate for the first quarter is pegged at $9.74 billion, reflecting a 6.6% increase from the previous year [1] - Non-GAAP earnings per share are anticipated to be in the range of $2.53 to $2.55, with a consensus estimate of $2.54, representing a 4.1% increase year-over-year [2] Earnings Performance - Salesforce has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 4.4% [3] - The Earnings ESP is +0.76%, indicating a potential earnings beat this quarter [4] Growth Drivers - The company is well-positioned for strong results due to its focus on digital transformation and cloud solutions, aligning product offerings with customer needs [5] - Growing demand for generative AI-enabled cloud solutions has enhanced customer engagement and competitive positioning [6] - Salesforce's expansion in key geographic markets and the public sector has unlocked new growth opportunities [7] Strategic Acquisitions - Recent acquisitions, including Spiff, Own, and Zoomin, have diversified revenue streams and enhanced capabilities, likely driving higher subscription revenues [8] - Revenue estimates for key cloud services include $2.14 billion for Sales, $2.34 billion for Service, $1.84 billion for Platform & Other, $1.35 billion for Marketing & Commerce, and $1.54 billion for Data [9] Profitability and Cost Management - Ongoing cost restructuring initiatives are expected to improve profitability, with a non-GAAP operating margin of 33.1% reported in the previous quarter [10] Market Performance and Valuation - Over the past year, Salesforce shares have risen 1.4%, underperforming the Zacks Computer – Software industry growth of 10.4% [11] - The stock is trading at a forward 12-month P/S of 6.48X, compared to the industry average of 9.25X, indicating a discount [14] Competitive Position - Salesforce maintains its leadership in the customer relationship management industry, consistently outperforming competitors like Microsoft, Oracle, and SAP [17] - Strategic acquisitions, such as the $27.7 billion acquisition of Slack, have enhanced its market position [18] - AI initiatives, including the introduction of Einstein GPT, have expanded its functionalities and improved customer interactions [19] Industry Outlook - Global IT spending is projected to reach $5.61 trillion in 2025, with enterprise software spending expected to grow by 14.2% year-over-year, positioning Salesforce to capture a significant share of this growth [20] Conclusion - The company's leadership in CRM, aggressive AI expansion, and favorable IT spending trends create a solid foundation for sustained growth, making the stock worth holding ahead of Q1 results [21]