What’s Next For Salesforce Stock After Q1 Beat?

Salesforce (NYSE:CRM) recently released its Q1 fiscal 2026 results (with the fiscal year ending in January), reporting sales of $9.83 billion and earnings per share of $2.58. Both figures surpassed consensus estimates of $9.75 billion and $2.53, respectively. Salesforce also recently announced the acquisition of Informatica for $8 billion, making it the company’s largest acquisition since Slack ($27 billion) in 2021. Furthermore, Salesforce raised its full-year outlook to $11.27-$11.33 in adjusted earnings per share and $41.0 billion-$41.3 billion in revenue, exceeding Street estimates of $11.16 earnings per share and $40.82 billion in revenue.

CRM stock, with -17% returns since the beginning of the year (through May 28), has underperformed the S&P 500 index, up 1%. Now, if you want an upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

Image by Innova Labs from Pixabay

After reviewing its recent performance, a key question emerges: Is CRM stock a buy at $280? Our answer is yes, and we believe its current valuation is attractive. We base this conclusion on a comparison of CRM stock’s current valuation against its operational performance in recent years, as well as its present and historical financial health.

Our in-depth analysis of Salesforce, across key parameters like Growth, Profitability, Financial Stability, and Downturn Resilience, indicates that the company maintains very strong operating performance and a robust financial condition. We’ll detail these findings below.

That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Salesforce’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, CRM stock looks reasonable compared to the broader market.

• Salesforce has a price-to-sales (P/S) ratio of 7.1 vs. a figure of 3.0 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 20.6 compared to 20.5 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 27 vs. the benchmark’s 26.4

How Have Salesforce’s Revenues Grown Over Recent Years?

Salesforce’s Revenues have seen notable growth over recent years.

• Salesforce has seen its top line grow at an average rate of 12.7% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Also, its quarterly revenues grew 8% to $9.8 Bil in the most recent quarter from $9.1 Bil a year ago (vs. 4.8% improvement for S&P 500). Its last 12 months revenues stood at $38.6 billion.

How Profitable Is Salesforce?

Salesforce’s profit margins are around the median level for companies in the Trefis coverage universe.

• Salesforce’s Operating Income over the last four quarters was $7.9 Bil, which represents a good Operating Margin of 20.4% (vs. 13.2% for S&P 500)
• Salesforce’s Operating Cash Flow (OCF) over this period was $13 Bil, pointing to a high OCF Margin of 34.5% (vs. 14.9% for S&P 500)
• For the last four-quarter period, Salesforce’s Net Income was $6 Bil – indicating a good Net Income Margin of 16% (vs. 11.6% for S&P 500)

Does Salesforce Look Financially Stable?

Salesforce’s balance sheet looks strong.

• • Salesforce’s Debt figure was $11 Bil at the end of the most recent quarter, while its market capitalization is $265 Bil (as of 5/28/2025). This implies a very strong Debt-to-Equity Ratio of 4.3% (vs. 19.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $11 Bil of the $99 Bil in Total Assets for Salesforce.  This yields a moderate Cash-to-Assets Ratio of 11% (vs. 13.8% for S&P 500)

How Resilient Is CRM Stock During A Downturn?

CRM stock has seen an impact that was worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on CRM stock? Our dashboard – How Low Can Salesforce Stock Go In A Market Crash? – has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

• CRM stock fell 58.6% from a high of $309.96 on 8 November 2021 to $128.27 on 16 December 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 1 March 2024
• Since then, the stock has increased to a high of $367.87 on 4 December 2024 and currently trades at around $275

COVID-19 Pandemic (2020)

• CRM stock fell 35.7% from a high of $193.36 on 20 February 2020 to $124.30 on 16 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 6 July 2020

Global Financial Crisis (2008)

• CRM stock fell 70.5% from a high of $18.61 on 23 June 2008 to $5.49 on 19 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 29 December 2009

Putting All The Pieces Together: What It Means For CRM Stock

In summary, Salesforce’s performance across the parameters detailed above are as follows:

• Growth: Very Strong
• Profitability: Neutral
• Financial Stability: Extremely Strong
• Downturn Resilience: Neutral
• Overall: Very Strong

Overall, Salesforce stock performs strongly across the parameters discussed. Its reasonable valuation further suggests it’s a good stock to buy at its current levels. At $280, CRM is trading at 7 times its trailing revenues, which is lower than its three-year average price-to-sales (P/S) ratio of 9x.

However, investors should certainly consider the inherent risks. For instance, the stock’s nearly 60% sharp fall during the most recent economic downturn indicates that CRM is prone to adverse market conditions.

While it looks like there is some upside to CRM stock, the Trefis Reinforced Value (RV) Portfolio, has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

While CRM may have some room for growth, it is helpful to see how Salesforce’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates