High Margins, 39% Discount: Buy Salesforce Stock Now

Salesforce (CRM) stock might be a good buy now. Why? Because you get high margins – reflective of pricing power and cash generation capacity – for a discounted price. Companies like this generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. The market tends to reward that.

What Is Happening With CRM

CRM may be down -14% so far this year, but the silver lining is that it is now 39% cheaper based on its P/S (Price-to-Sales) ratio compared to 1 year ago.

The stock may not reflect it yet, but here is what’s going well for the company. Salesforce updated its full-year fiscal 2026 revenue guidance to $41.45-$41.55 billion. Current remaining performance obligations rose 11% to $29.4 billion, signaling future revenue. New offerings like Agentforce and Data 360 are gaining traction, driving nearly $1.4 billion in annual recurring revenue from over 9,500 paid deals. Additionally, consistent annual price escalations of 5-7% in many contracts underpin a 17% rise in operating cash flow in Q3 fiscal 2026.

CRM Has Strong Fundamentals

• Recent Profitability: Nearly 33.5% operating cash flow margin and 22.0% operating margin LTM.
• Long-Term Profitability: About 31.8% operating cash flow margin and 19.2% operating margin last 3-year average.
• Revenue Growth: Salesforce saw growth of 8.4% LTM and 10.0% last 3-year average, but this is not a growth story
• Available At Discount: At P/S multiple of 5.3, CRM stock is available at a 39% discount vs 1 year ago.

Below is a quick comparison of CRM fundamentals with S&P medians.

*LTM: Last Twelve Months

Don’t Expect A Slam Dunk, Though

While CRM stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Salesforce (CRM) took some pretty big hits during market turmoil. It fell about 70% in the Global Financial Crisis and dropped nearly 59% in the inflation shock. Even during less severe sell-offs, like the 2018 correction and the Covid pandemic, it still declined over 24% and 35% respectively. The stock’s strong fundamentals don’t make it immune when volatility spikes—drawdowns like these show that risk is very real, even for well-regarded companies. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read CRM Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

If you want more details, read Buy or Sell CRM Stock.

How We Arrived At CRM Stock

CRM piqued our interest because it meets the following criteria:

1. Greater than $10 Bil in market cap
2. High CFO (cash flow from operations) margins or operating margins
3. Meaningfully declined in valuation over the past 1 year

But if CRM doesn’t look good enough to you, here are other stocks that also check all these boxes:

1. Visa (V)
2. T-Mobile US (TMUS)
3. Intuit (INTU)

Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfil the criteria above would have performed as follows:

• Average 12-month forward returns of nearly 19%
• 12-month win rate (percentage of picks returning positive) of about 72%

A Multi Asset Portfolio Gives You Safer Smarter Growth

Markets move differently but a mix of assets smooths volatility. A multi asset portfolio keeps you invested and reduces the impact of sharp drops in any single area.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices