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Salesforce, Inc. (CRM) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Salesforce, Inc. (CRM)

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Intrinsic Value (DCF)

Current$241.06
→
Intrinsic$486.17
+102%
$324.28$486.17$807.78
Market implies 7% growth for 5 years
DCF analysis suggests CRM could have 102% upside at 25% growth — verify assumptions match your view.
At $241, the market prices in only 7% growth — below historical 25%, suggesting low expectations.
Range: Bear $324 → Bull $808. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$618$668$721$778
10%$418$451$486$524
12%$312$337$362$390
14%$247$266$286$308

Bull Case

  • Bull case ($808) offers 235% upside at 30% growth, 8% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (7%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($324) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$15.54B
Year 2$19.43B
Year 3$24.29B
Year 4$30.36B
Year 5$37.95B
Terminal$601.29B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$12.43BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is CRM stock undervalued or overvalued?
🟢 UNDERVALUED

CRM trades at $241.06 vs. our DCF-derived intrinsic value of $329.97, implying +26% upside. At a 9.5% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of CRM's future cash flows. The bear case ($220.27) still suggests upside, providing margin of safety.

What is CRM's intrinsic value?

Using a 5-year DCF model: Base FCF of $12.43B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $2.54B net debt and dividing by 0.97B shares: Bear $220.27 | Base $329.97 | Bull $490.75. Current price $241.06 implies +26% to base case.

How is CRM's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($323.93B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.