GERMANY – 2026/01/17: In this photo illustration, Salesforce, Inc. logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Salesforce (CRM) stock should be on your radar. Here’s why – it is presently trading within the support range ($210.50 – $232.66), levels from which it has significantly rebounded in the past. Over the past decade, Salesforce stock has garnered buying interest at this level on 6 occasions and subsequently managed to yield an average peak return of 35.7%.
However, having a support zone by itself is insufficient; rebounds become more probable when fundamentals, sentiment, and market conditions coalesce. How does that appear for CRM?
Rebound likely; undervalued, strong FCF, AI tailwinds.
CRM, currently priced at $220, is severely undervalued by 42.7% according to DCF analysis, while showing strong FCF growth, projected to reach a 44.9% margin by FY2026. In spite of recent stock declines (32% over one year) due to previous revenue guidance shortcomings and a deceleration in Sales Cloud growth, analyst consensus remains a “Buy” with price targets near $325. Industry tailwinds in AI-driven, autonomous CRM and integration are substantial, with Salesforce strategically positioning itself through Agentforce and Slackbot. The prevailing price indicates considerable skepticism, yet the underlying financial robustness and future market coherence suggest upward potential. The upcoming earnings report may serve as a significant catalyst.
- Revenue Growth: 8.4% LTM and 10.0% last 3-year average.
- Cash Generation: Nearly 32.0% free cash flow margin and 22.0% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth for CRM in the past 3 years was 8.4%.
- Valuation: CRM stock trades at a PE multiple of 29.1
CRM Fundamentals vs. S&P Median
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For more details on CRM fundamentals, read Buy or Sell CRM Stock.
And What If The Support Breaks?
CRM is susceptible to significant declines despite its solid fundamentals. It experienced a decline of approximately 70% during the Global Financial Crisis and nearly 59% in the recent inflationary shock. The Covid pandemic and the 2018 correction also impacted it severely, causing the stock to drop around 36% and 25%, respectively. Strong companies can still endure steep declines when market conditions become unfavorable. The risk is always present, regardless of how promising the narrative may be.
However, the risk is not confined to significant market downturns. Stocks can decline even amid healthy markets, particularly during events such as earnings announcements, business updates, or shifts in outlook. Review CRM Dip Buyer Analyses to see how the stock has bounced back from sharp declines in the past.
Still uncertain about CRM stock? Consider a portfolio approach.
The Best Investors Think In Portfolios
Stocks rise and fall – the essential strategy is to remain invested. A well-balanced portfolio allows you to stay in the market, amplifies gains, and mitigates individual stock risk.
The Trefis High Quality (HQ) Portfolio, containing 30 stocks, has a history of consistently outperforming its benchmark which includes all three – the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this success? Collectively, HQ Portfolio stocks have yielded superior returns with reduced risk compared to the benchmark index; it has been a less volatile experience, as demonstrated in HQ Portfolio performance metrics.