Key Takeaways:
- Agentic Industry Push: Salesforce stock reflects a strategic shift toward regulated industries as Salesforce scales Agentforce across health and financial services with $5 billion ARR.
- Healthcare Expansion: Salesforce stock incorporates deeper life sciences adoption after January 2026 JPMorgan remarks confirmed use by 6 top pharma customers.
- Valuation Target: Salesforce stock could reach $248 by January 2028 based on 10% revenue growth, 36% operating margins, and a 15x P/E.
- Return Math: Salesforce stock implies 31% total upside from $190, translating into a 14% annualized return over 2 years.
Salesforce (CRM) provides enterprise CRM software spanning sales, service, marketing, analytics, and commerce for large global organizations since 1999.
Salesforce generated $38 billion revenue and $29 billion gross profit in 2025, showing strong 77% gross margins.
Moreover, Salesforce spent $22 billion on operating expenses and produced $9 billion operating income, lifting operating margins to 22%.
Additionally, on January, Salesforce detailed Agentforce adoption in healthcare, citing 6 top pharma customers and $5 billion ARR.
Currently, CRM stock trades near $190 and 15x earnings despite 22% margins, which raises questions about what the market still doubts.
What the Model Says for CRM Stock
Salesforce combines subscription CRM scale with improving efficiency, supporting moderate expectations given mature markets and capital intensity.
However, the model assumes 10% revenue growth, 36% margins, and a 15x exit multiple, producing a $248 target price.
Therefore, the modeled 31% total upside equals a 14% annualized return, which competes reasonably with public equity alternatives.
The valuation model signals a Buy because a 14% annualized return exceeds typical equity hurdle rates, indicating the current price compensates investors for execution risk while offering meaningful upside beyond capital preservation.
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.
Here’s what we used for CRM stock:
1. Revenue Growth: 9.9%
Salesforce revenue growth has slowed from double-digit expansion as CRM penetration increased across large enterprises.
Current growth is supported by $38 billion revenue scale and incremental contributions from Data Cloud and Agentforce industry deployments.
Sustaining 9.9% growth requires continued enterprise spending and successful cross-sell execution while macro pressure or IT budget tightening remains a risk.
This represents an improvement over the 1-year historical growth rate of 8.7%, indicating modest reacceleration but still positioning Salesforce as a mature software business rather than a high-growth compounder.
According to consensus analyst estimates revenue growth is sensitive to enterprise demand, and slower adoption quickly compresses upside and reduces modeled returns.
2. Operating Margins: 36.2%
Salesforce margins have expanded meaningfully as cost discipline followed years of heavy acquisition and integration spending.
Operating income of $9 billion and prior 22% margins show room for efficiency gains through expense control and platform leverage.
Reaching 36.2% margins depends on limited reinvestment, stable pricing, and avoidance of margin dilution from aggressive AI spending.
This is materially above the 1-year historical operating margin of 33%, signaling that the model’s upside is driven primarily by sustained cost discipline and operating leverage rather than revenue acceleration.
Based on street consensus estimates margin expansion leaves little cushion, and cost slippage would first erode valuation support rather than revenue.
3. Exit P/E Multiple: 15x
Salesforce valuation has compressed as growth moderated and investors repriced large-cap software toward mature earnings profiles.
A 15× exit multiple reflects a conservative terminal assumption that capitalizes earnings at a market-level multiple, despite margin expansion and steady free cash flow generation.
This multiple assumes that margin gains are fully recognized in forecasts and that incremental upside from re-rating is limited as Salesforce transitions from growth-led valuation to earnings durability.
Multiple support depends on consistent execution and stable margins, while any growth or cost discipline slippage would result in further de-rating rather than revenue-driven multiple expansion.
In line with consensus expectations, the 15× exit multiple embeds no sentiment recovery, positioning valuation support on execution alone rather than a return to premium software multiples.
What Happens If Things Go Better or Worse?
Salesforce stock outcomes depend on enterprise IT spending discipline, platform cross sell execution, and sustained margin control, setting up multiple paths through 2030.
- Low Case: If enterprise demand stays cautious and pricing power softens, revenue grows around 8.5% and margins stay near 29.2% → 9.3% annualized return.
- Mid Case: With core CRM demand holding and cost controls sustained, revenue growth near 9.4% and margins improving toward 31.1% → 15.7% annualized return.
- High Case: If AI products scale efficiently and cross sell accelerates, revenue reaches about 10.4% and margins approach 32.6% → 21.6% annualized return.
How Much Upside Does It Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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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!
