Key Stats for CRM Stock
- Year-to-Date Performance: -30%
- 52-Week Range: $175 to $296
- Valuation Model Target Price: $289
- Implied Upside: 55%
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What Happened?
Salesforce stock has come under pressure in 2026 as investors debate whether the company’s push into artificial intelligence can offset slowing growth in its core customer relationship management (CRM) software business. Shares are down about 30% year to date, recently trading near $187 per share, reflecting a shift in sentiment as the company transitions from a high-growth SaaS leader to a more mature, margin-focused business.
The stock is down primarily because revenue growth has slowed to around 10% compared to over 20% in prior years, leading investors to assign lower valuation multiples even as profitability improves. This has made it harder for Salesforce to regain momentum, as investors have favored software companies showing clearer top-line acceleration tied to AI, including peers like Microsoft and ServiceNow.
This month, at the Morgan Stanley Technology, Media & Telecom Conference, Salesforce highlighted strong momentum following its FY26 results, reporting a record fourth quarter and record cash flow while reiterating confidence in returning to double-digit organic revenue growth over the next 12 to 18 months.
Management also pointed to accelerating demand for higher-value products, including a 300% quarter-on-quarter increase in premium SKU adoption, while CFO Robin Washington said the business is “on the continuum to meet our objectives over time.” Much of this strategy centers around products like Data Cloud, which helps companies unify customer data across systems so AI tools can automate workflows and improve decision-making.
Recent institutional activity showed mixed positioning rather than a clear directional trend. Generate Investment Management raised its stake by 356.6% to 91,318 shares worth about $24 million, while Chemung Canal Trust increased its position by 513.9% and Global X Japan boosted holdings by 273.3%. On the other hand, Mirador Capital cut its stake by 64.8%, Norden Group reduced exposure by 74.8%, and J. L. Bainbridge trimmed its position by 46.5%, while overall institutional ownership remains around 80%, reflecting long-term confidence despite near-term uncertainty.
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Is CRM Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 10.3%
- Operating Margins: 36.4%
- Exit P/E Multiple: 14.1x
Salesforce’s outlook is increasingly driven by a shift toward higher-margin growth, where expanding operating margins and disciplined cost control matter more than rapid revenue acceleration as enterprise software spending normalizes.
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Growth is expected to come from deeper monetization of its existing customer base, particularly through AI tools like Einstein, which automate tasks such as sales forecasting and customer support, allowing Salesforce to increase revenue per customer.
Data Cloud is another key driver, as it organizes customer data across systems and enables AI to deliver more accurate insights, which can lead to larger contracts and stronger customer retention.
Margin expansion remains critical, as the company continues optimizing its cost structure while scaling higher-value products, allowing incremental revenue to translate more efficiently into earnings.
At current levels, Salesforce appears modestly undervalued, with future performance likely driven by AI monetization, Data Cloud adoption, and sustained margin expansion rather than a return to high-growth software multiples.
How Much Upside Does CRM Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
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