Research note · 2 October 2026
Salesforce.com Inc CRM
LONG price $234.69 · base case $299.04 · expected +24% over 540 days
The call
Salesforce trades at a significant discount to intrinsic value, driven by market pessimism around AI infrastructure costs and enterprise software demand. The company’s FY27 guidance of 11-12% revenue growth, coupled with a structurally improved cost base from recent restructuring and AI-driven productivity, supports robust operating leverage. Trailing twelve-month free cash flow of $15.47 billion and a 35.2% FCFF margin demonstrate exceptional cash generation, which, combined with aggressive capital return ($35.1 billion in TTM buybacks), positions the stock for substantial per-share value accretion.
Why the opportunity exists, in the desk's view: a narrative overshoot.
What decides the case
- AI adoption speed vs infrastructure costs
- Customer attrition and enterprise renewal cycles
- Share repurchase pace and capital allocation
What breaks the case
| Shock to the base case | Value per share | vs price |
|---|---|---|
| Base case as planned | $299.04 | 27% |
| Starting cash flow 10% higher | $332.33 | 42% |
| Growth 5 points higher every year | $373.30 | 59% |
| Discount rate 100bp higher | $258.56 | 10% |
| Starting cash flow 10% lower | $265.75 | 13% |
| Growth 5 points lower every year | $236.59 | 1% |
| Cost of debt 200bp higher | $287.19 | 22% |
The base case equals the price at a 11.6% discount rate, or if every year's growth were -5.2% points different. Thresholds, not forecasts.
Exposures
- Currencies, negative for the equity
- Interest rates, negative for the equity
Model-authored research with an editorial gate; every figure traces to the filing or a stated assumption and every calculation was reproduced before publication. Not investment advice. Do not redistribute.