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How do I use this slideshow?
1. The slideshow contains the most important forecasts for a company's divisions, or product lines.
2. Disagree with a forecast? Simply drag the trend-line to test your own what-if scenario, and see possible upside or downside risks for a stock.
3. Plot data for competitors and benchmarks using the "Competition" button.
4. In the slide caption, and the area below the slideshow, see the key trends impacting a given forecast, as well as historical explanations.
5. The first slide shows which one of a company's divisions, or product lines, contribute most to its stock price. Clicking on a division arm of the diagram, you can explore the most important forecasts for the division. -
How do we get the historical numbers for this chart?
Trefis has a team of in-house Analysts who gather historical data from company filings and other verifiable sources. The data and sources are available on the Trefis website.
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Who came up with the Trefis forecast for future years?
The Trefis team of in-house Analysts considers a variety of factors when projecting any forecast, and their rationale is explained on the Trefis website.
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How does my dragging the trendline on the chart impact the stock price?
1. We use forecasts for various business drivers to calculate forecasted Revenues and Profits for .
2. We then use forecasted Profits in a Discounted Cash Flow (DCF) model to obtain the Price Estimate for . -
How does Trefis come up with the Price estimate for a company?
The Trefis forecasts are used to calculate future revenues, costs and cash profits for . The future cash profits are then discounted to the present to arrive at the total value of . The total value divided by number of shares outstanding is the Price estimate.
VALUATION HIGHLIGHTS
- Cloud Based CRM Software constitutes 60% of the Trefis price estimate for Salesforce's stock.
- Cloud Software constitutes 36% of the Trefis price estimate for Salesforce's stock.
WHAT HAS CHANGED?
CRM Stock Performance In Recent Years
The changes in CRM stock over the recent years have been far from consistent. Returns for the stock were 14% in 2021, -48% in 2022, 98% in 2023, and 28% in 2024.
In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, 24% in 2023, and 23% in 2024 - indicating that CRM underperformed the S&P in 2021 and 2022.
Note: Salesforce's FY'25 ended on January 31, 2025.
Latest Earnings
The company posted total revenues of $10.2 billion in Q2 2026 - up 10% y-o-y. This was driven by an 11% increase in subscription & support revenues.
For FY 2025 (ended Jan 2025), the company's revenue was $37.9 billion, up 9% y-o-y. Subscription and support revenues were $35.7 billion, an increase of 10% y-o-y. FY25 GAAP Operating Margin was 19%, and Non-GAAP Operating Margin was 33%.
For FY2026, the company expects its revenue to be $41.2 billion and adjusted earnings to be $11.35 per share, at the mid-point of the provided range.
Large Acquisitions
In August 2019, Salesforce.com completed its acquisition of Tableau in an all-stock transaction worth $15.7 billion. Later, in Dec 2020, the company acquired Slack for $27.7 billion.
- AI Platform Einstein To Continue To Drive Strong Top-Line Growth
- Strategic Partnerships Will Boost Top-line Growth
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Below are key drivers of Salesforce.com's value that present opportunities for upside or downside to the current Trefis price estimate for Salesforce.com:
Cloud-based Customer Relationship Management (CRM) Software
- Cloud-Based CRM Software Revenue: Salesforce.com's CRM market share has increased at a brisk pace post the economic crash in 2008-09. We believe that Salesforce.com will benefit from the fast growth of the cloud computing CRM market. The favorable factors for this tremendous growth are speed and ease of implementation, and low total cost of ownership, thus boosting revenues from CRM Software. There could be an upside of about 15% to our estimate for Salesforce.com if its revenue increases at a faster rate to cross $60 billion by the end of the Trefis forecast period. On the other hand, there could be a 20% downside to our estimate for Salesforce.com if its revenue just reaches $30 billion by the end of the Trefis forecast period.
Cloud Software Revenue
- Salesforce's Cloud Software market revenue: The overall cloud-based software market is expected to grow at a fast rate. Salesforce.com continues to grow in this market organically, as well as through the acquisition route. It has launched a series of new cloud-based software applications like Chatter, Database.com, Data.com, Do.com, Desk.com, and Heroku. It also generates revenues from its application platform Salesforce1 and marketplace AppExchange. The segment revenues stand at just above $13 billion in 2025. There could be a 10% upside if our estimate for Salesforce.com's Cloud Software revenue increases at a faster pace and reaches $37 billion by the end of the forecast period. However, we believe Salesforce needs to pursue an inorganic growth strategy to be able to attain that.
For additional details, select a driver above or select a division from the interactive Trefis split for Salesforce.com at the top of the page.
BUSINESS SUMMARY
Salesforce.com specializes in providing customer relationship management (CRM) software solutions, encompassing sales and customer service tools, along with cloud-based application, database, and platform services. These solutions empower businesses to effectively manage customer data, improve customer service, and drive sales growth. As a pioneer in cloud-based delivery, Salesforce.com delivers its software remotely via the Internet.
Cloud-based CRM software
Salesforce.com delivers its software through the cloud, eliminating the need for on-site installations or server maintenance. Customers access online software with minimal implementation efforts. Revenue is primarily generated through subscription and support fees for these applications, which facilitate efficient data management and optimization across various business functions like sales, marketing, and customer service. As a leading provider of cloud-based application services, over 94% of Salesforce.com's revenue comes from subscription and support fees.
Other cloud based software
Beyond its core CRM offerings, Salesforce.com is strategically positioned to capitalize on the growing adoption of cloud-based solutions across corporate IT departments. As businesses shift away from traditional hardware and on-premise software, Salesforce.com aims to provide a comprehensive suite of cloud services, encompassing SaaS, PaaS, and IaaS. This expansion includes Force.com, an application development platform, and AppExchange, an application marketplace.
Furthermore, Salesforce.com has introduced a range of cloud-based applications and services, such as Chatter, Database.com, Data.com, Desk.com, Heroku, and Radian6. The acquisition of ExactTarget further solidified its commitment to becoming a complete cloud-based provider for all industries.
SOURCES OF VALUE
Cloud-Based Customer Software is Salesforce.com's core and most valuable business. The division's value depends heavily on three main factors:
1. Growth in the size of the CRM Software Market
The CRM software market consists of two types of software: (1) On-Premise Software, and (2) On-Demand (Cloud-Based) Software.
- On-Premise Software is the traditional enterprise software model, which requires each customer to install, configure, manage, and maintain the software on their in-house hardware.
- On-Demand (Cloud-Based) Software is delivered remotely over the Internet on an as-needed basis with little or no implementation services required and without the need to install and manage third-party software in-house.
The overall CRM market has rapidly grown over the years. Salesforce.com has been the undisputed market leader for many years now and currently commands around 21-22% of the market share, which is more than double that of the nearest competitor.
2. Salesforce.com's Growing Share in the CRM Software Market
Salesforce.com has been increasing its share in the CRM market at a consistent rate for the last few years. This growth is attributable in large part to the shift from on-premise CRM software to cloud-based CRM software globally from IT enterprises, which benefits Salesforce.com. Going forward, we expect Salesforce to continue with its strategy of investing heavily in sales & marketing and R&D activities to support a strong, double-digit top-line growth rate.
3. Cloud-based software suites that complement its CRM offering
Salesforce's additional offerings, comprising development tools and data management suites, provide a holistic product portfolio for small businesses and should complement the company's strong top-line growth rate in the future.
KEY TRENDS
On-going Shift to Software-as-a-Service (SaaS)
Software as a Service (SaaS) offers businesses online access to software through a subscription model, where they pay only for the features they use. This cost-effective approach is particularly beneficial for small and medium enterprises with limited IT budgets. Since the software is hosted on the service provider's servers, businesses eliminate the need for costly software purchases and implementations. We anticipate a continued rise in SaaS adoption.
Corporate Confidence in Data Security for Software-as-a-Service Applications
While large enterprises often hesitate to adopt cloud services due to data security concerns — with 75% fearing breaches, according to GTRA research — the pressure to reduce costs is driving a shift towards SaaS deployments. Despite concerns about data residing outside their control, the elimination of hefty hardware costs is proving compelling. Consequently, we anticipate a broader adoption of SaaS across various industries.
Methodology
Trefis analyzes how a company's products impact its stock price. Using mathematical models to forecast a company's future revenues, costs and cash profits then discounting them to the present, Trefis comes up with a Trefis Price. The Trefis Price is an estimate of the fair or intrinsic value of the company's present stock price.
The selection process
The Trefis tool currently covers 200+ symbols. In building its coverage Trefis selected companies using the following criteria:
- Companies with high interest among retail investors were more likely to be selected. Interest among retail investors was judged by percentage of retail ownership, overall volume of news flow, as-well-as general awareness in the marketplace.
- Market cap/size: Larger cap companies are more popular and cater to the interests of a larger set of investors/finance site visitors, and as-such were more likely to be selected.
- Sector-wise coverage build-out: Trefis also selected to cover companies in the same market, at the same time. For example, when Trefis started covering Apple, covering other companies like Hewlett Packard and Dell in the mobile, and notebooks/desktop markets was a natural next step.
Trefis initially started out covering companies in technology, media and telecom sectors. Since then it has expanded coverage to consumer, automotive, financial services and energy. Trefis is currently building out more coverage within industrials and will be moving into health care over the next year. Trefis also builds out coverage selectively on smaller companies that have high growth potential as well as companies that are in the process of going public and attract interest from finance site visitors and investors.
Trefis does not favor any companies, except follow the selection mechanism outlined above to guide its judgment.
The Trefis tool limitations:
- The Trefis price estimate may not converge with market price: The Trefis price estimate is an estimate of the intrinsic value of a company; just like a price estimate that any other Wall Street firm might come up with. Trefis understands that multiple factors, some quantifiable, and some not so easily tackled, influence a company's stock price. Though the Trefis view is a very detailed fundamental model of the business, it is still just a model - an artificial representation of the real company, which is much more complex.
- No user modification of structure: While Trefis allows users to modify forecasts for any of the drivers in its analysis of a company; it currently does not allow users to change the structure by adding or removing drivers or divisions.
The Trefis Tool Key assumptions
- The Trefis price includes forecasts of a company's fundamental drivers (examples: pricing, units, market share of a company's product lines), which are then factored into the Trefis price estimate for the company's stock.
- In addition, Trefis discounts a company's cash flows at a company-specific discount rate. Cash flows beyond the explicit forecast period are accounted for using a terminal growth rate.
IMPORTANT: The projections or other information generated by the Trefis price estimate tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results will vary with each use and over time.