Salesforce (CRM) is back in focus as investors weigh an upcoming earnings report that is expected to show double digit growth in both earnings per share and revenue, along with fresh AI and capital return updates.

Recent news around AI partnerships, a larger share buyback program, dividend growth and deals like the U.S. Department of Labor contact center has arrived against a weaker backdrop, with a 30 day share price return of 9.47% and a 1 year total shareholder return of 24.52%, suggesting momentum has faded both recently and over longer horizons.

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With Salesforce shares down sharply over the past year, despite double digit earnings and revenue growth expectations and a sizeable discount to analyst targets, is the stock now mispriced, or is the market already baking in much of that future growth?

Most Popular Narrative: 18.3% Undervalued

The most followed valuation narrative currently places Salesforce’s fair value at $223.99 per share, compared with the last close of $182.96, creating a sizable gap for investors to assess.

Salesforce May Be A Rare Example Of Unlocking Competitive Moat With AI

• I believe that AgentForce will replace interactive chatbots at a higher price.

• CRM has a wide competitive advantage against AI peers because it can train models on customer data.

Want to see what justifies a higher price tag, even as growth settles below market forecasts? The featured narrative leans on compounding revenue gains, firmer margins and a valuation multiple that assumes Salesforce earns its enterprise AI premium over time.

Result: Fair Value of $223.99 (UNDERVALUED)

However, if Salesforce’s push into smaller customers underdelivers or AI tools fail to justify premium pricing, the case for a higher valuation could weaken quickly.

Next Steps

Does this story feel too optimistic or too cautious? Take a closer look at the data, stress test the assumptions, and see how they line up with the 4 key rewards.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.