Introducing Valuation Models! 
Key Takeaways:
- Salesforce stock could conservatively reach $363 per share by early 2028.
- That represents a potential 34% upside from today’s price of approximately $272 per share.
- The CRM giant is positioning itself as the leader in enterprise AI with Agentforce and strategic acquisitions.
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Salesforce (CRM) stands as the world’s leading customer relationship management platform, serving millions of businesses across every industry and geography.
It has evolved far beyond traditional CRM into a comprehensive cloud computing platform that powers sales, service, marketing, commerce, and analytics for organizations ranging from five-person startups to Fortune 100 enterprises.
With recent innovations in artificial intelligence through Agentforce and strategic acquisitions like Informatica, Salesforce is positioning itself at the forefront of the enterprise AI revolution while maintaining its leadership in the rapidly growing CRM market.
We conducted a comprehensive valuation analysis on Salesforce stock to assess its investment potential through 2028.
Using reasonable assumptions based on the company’s AI transformation strategy and its market leadership position, our model suggests that Salesforce stock could reach $363 per share by early 2028, representing a 34% upside potential.
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What Salesforce Does
Salesforce operates the world’s most comprehensive cloud-based customer relationship management platform, serving as the backbone for customer interactions across industries.
Its Sales Cloud helps organizations manage their entire sales process, from prospecting to closing deals, while Service Cloud enables superior customer support experiences.
Marketing Cloud provides sophisticated campaign management and customer journey tools, and Commerce Cloud powers e-commerce experiences.
Beyond these core clouds, Salesforce has built a robust platform ecosystem that includes Tableau for analytics, MuleSoft for integration, Slack for collaboration, and now Agentforce for AI-powered automation.
This “deeply unified platform” enables seamless data flow between applications, providing customers with a complete 360-degree view of their business operations. This sets Salesforce apart from point solutions that require complex integrations.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
In our valuation, we’ll simply use analysts’ consensus estimates and break down what analysts think the stock is worth today.
Here’s what we used for CRM stock:
1. Revenue Growth: 9.3% CAGR
Salesforce has demonstrated strong growth, with revenue increasing 8.7% over the past year and 17.3% annually over the last five years.
Its expansion into AI through Agentforce, plus strategic acquisitions like Informatica, positions it well for continued growth as enterprises increasingly adopt AI-powered CRM solutions.
2. Operating Margins: 35.1%
Salesforce’s EBIT margins currently stand at 33.0% over the last twelve months.
Its transition to AI-powered solutions and platform efficiencies should drive margin expansion, as AI capabilities reduce operational complexity while commanding premium pricing.
3. Exit P/E Multiple: 23.3x
Salesforce currently trades at its historical P/E multiple of 23.3x. Given its leadership position in the high-growth CRM market, AI innovation leadership, and strong competitive moats, we believe this premium valuation multiple is sustainable as the business benefits from AI acceleration.
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What the Model Says for CRM Stock
With these inputs, the valuation model estimates that CRM stock could reach approximately $363/share by the end of 2027.
This translates to an annualized return of approximately 11.9% over the next 2.6 years. The forecast assumes Salesforce successfully executes its AI transformation strategy while maintaining its market leadership position in the rapidly evolving enterprise software landscape.
The model reflects Salesforce’s ability to monetize its AI innovations through Agentforce, capture synergies from strategic acquisitions, and expand its platform capabilities to serve the growing market for enterprise AI.
The model forecasts the business’s future earnings-per-share based on revenue growth and margin expansion and then applies a P/E multiple to estimate the future stock price.
This helps investors understand what financial performance is required to generate strong returns and how much upside is available if those expectations are met.
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What Happens If Things Go Better or Worse?
The model enables various scenarios based on how effectively Salesforce executes its AI strategy and captures market opportunities.
Here’s the range of potential outcomes:
- Low Case: Slower AI adoption with moderate growth → 6-8% annual returns.
- Mid Case: Steady execution of AI strategy → 10-12% annual returns.
- High Case: AI leadership drives accelerated growth → 15-17% annual returns.
Even the conservative scenario offers attractive returns, reflecting Salesforce’s strong competitive position and the defensive nature of its subscription-based business model.
Salesforce’s earnings growth is likely to be driven by a combination of factors:
- AI Platform Leadership: Agentforce represents a new category of enterprise software that enables autonomous agents to work alongside humans, creating productivity gains and new revenue opportunities.
- Strategic Acquisitions: The pending Informatica acquisition will enhance Salesforce’s data capabilities, providing richer data governance and integration that supercharges AI applications across the platform.
- Platform Network Effects: With over 9.5 million applications built on the platform and growing, Salesforce benefits from increasing network effects that make the platform more valuable for every participant.
- Enterprise AI Adoption: As businesses across industries adopt AI solutions, Salesforce’s comprehensive platform approach positions it to capture a disproportionate share of enterprise AI spending.
- Subscription Model Resilience: The company’s recurring revenue model generates predictable cash flows and high customer lifetime value, enabling consistent growth across economic cycles.
How Wall Street Sees CRM Stock
Wall Street analysts maintain a positive outlook on Salesforce, with an average price target of approximately $353 per share, implying about 30% upside from current levels.
Our model aligns well with Street expectations while reflecting the potential for AI-driven outperformance.
See analysts’ growth forecasts and price target for Salesforce stock (It’s free!) >>>
Risks to Consider
Despite the bullish outlook, investors should be aware of several risks that could impact Salesforce’s growth trajectory:
- AI Competition: Intense competition from Microsoft, Google, and other tech giants in the enterprise AI space could pressure market share and pricing power.
- Integration Execution: Successfully integrating major acquisitions, such as Informatica, while maintaining platform performance and customer satisfaction presents significant operational challenges.
- Economic Sensitivity: While CRM software is generally resilient, economic downturns could reduce enterprise IT spending and pressure new customer acquisition efforts.
- Technology Evolution: Rapid changes in AI technology could require significant ongoing investment and risk obsolescence of current capabilities.
- Regulatory Environment: Increasing scrutiny of AI applications and data privacy could impact product development and go-to-market strategies.
TIKR Takeaway
Salesforce presents a compelling AI transformation story as it leverages its market-leading CRM platform to become a leader in enterprise AI.
Its unified platform approach, strong customer relationships, and comprehensive AI strategy position it well for sustained growth in the evolving enterprise software market.
The 34% upside potential over the next 2.6 years, combined with the company’s recurring revenue model and innovation track record, makes Salesforce an attractive option for investors seeking exposure to enterprise AI trends while benefiting from established market leadership.
Success will depend on management’s ability to execute the AI strategy, successfully integrate acquisitions, and maintain competitive advantages in an increasingly crowded enterprise AI market.
Is CRM stock a buy over the next 24 months? Use TIKR’s Valuation Model alongside analysts’ growth forecasts and price targets to see if it is undervalued today.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
