Intrinsic Value Salesforce, Inc. (FOO.DE)

• Previous Close: €179.94
• Intrinsic Value: €106.71
• Upside potential: -41%

Stock Valuation Context

Business Model And Market Position

Salesforce, Inc. is a global leader in customer relationship management (CRM) technology, offering its Customer 360 platform to unify data and workflows across sales, service, marketing, commerce, and analytics. The company operates in the highly competitive software-as-a-service (SaaS) sector, serving diverse industries such as financial services, healthcare, and manufacturing. Its core revenue model is subscription-based, with additional income from professional services and certification programs. Salesforce differentiates itself through its integrated ecosystem, which includes flagship products like Sales Cloud, Service Cloud, and Marketing Cloud, as well as acquired platforms such as Slack, Tableau, and MuleSoft. This broad portfolio enables enterprises to streamline operations and enhance customer engagement through AI-driven insights and automation. The company maintains a strong market position, competing with tech giants like Microsoft and Oracle, while leveraging its first-mover advantage in cloud-based CRM. Its direct sales force and extensive partner network further solidify its global reach and enterprise credibility.

Revenue Profitability And Efficiency

Salesforce reported revenue of €37.9 billion for FY 2025, reflecting steady growth in its subscription-based model. Net income stood at €6.2 billion, with diluted EPS of €6.42, indicating robust profitability. Operating cash flow reached €13.1 billion, underscoring efficient cash generation, while capital expenditures of -€658 million highlight disciplined investment in infrastructure and R&D.

Earnings Power And Capital Efficiency

The company demonstrates strong earnings power, driven by high-margin recurring revenue streams and scalable cloud infrastructure. Its capital efficiency is evident in its ability to convert revenue into operating cash flow at a 34.6% margin, supporting reinvestment in innovation and strategic acquisitions without compromising financial stability.

Balance Sheet And Financial Health

Salesforce maintains a solid balance sheet with €8.8 billion in cash and equivalents, providing liquidity against €11.4 billion in total debt. The manageable leverage and strong cash flow position the company well for continued growth and potential M&A activity, though investors should monitor debt levels in a rising interest rate environment.

Growth Trends And Dividend Policy

The company has consistently grown revenue through organic expansion and acquisitions, with a focus on AI and data analytics. Its dividend payout of €1.48 per share signals a commitment to returning capital to shareholders, though the yield remains modest compared to mature tech peers, reflecting a growth-oriented capital allocation strategy.

Valuation And Market Expectations

With a market cap of €236.6 billion and a beta of 1.42, Salesforce trades at a premium, reflecting investor confidence in its cloud leadership and long-term growth prospects. The valuation assumes sustained high single-digit revenue growth and margin expansion as the company scales its platform ecosystem.

Strategic Advantages And Outlook

Salesforce's strategic advantages include its dominant CRM market share, sticky enterprise customer base, and integrated product suite. The outlook remains positive, with AI and automation trends likely to drive demand for its solutions, though competition and macroeconomic pressures pose risks to growth trajectories.

Sources

Company filings, Bloomberg