DCF Studio

    CRM · NYQ · Technology

    Salesforce, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 72.92

    Market price

    USD 226.18

    Implied upside

    -67.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-01-31

    AdjustedReported capital expenditure averages 1.96% of revenue against depreciation and amortisation of 10.34%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 10.34% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 72.92-67.8%
    Exit multiple
    USD 166.45-26.4%
    Market price
    USD 226.18

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn6bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 46.3bnUSD 50.8bnUSD 55.2bnUSD 59.6bnUSD 63.8bnUSD 67.7bnUSD 71.2bnUSD 74.2bnUSD 76.8bnUSD 78.7bn+6.1%
    EBITUSD 7.5bnUSD 8.2bnUSD 9.0bnUSD 9.7bnUSD 10.3bnUSD 11.0bnUSD 11.5bnUSD 12.0bnUSD 12.4bnUSD 12.8bn+6.1%
    NOPATUSD 6.1bnUSD 6.7bnUSD 7.2bnUSD 7.8bnUSD 8.4bnUSD 8.9bnUSD 9.3bnUSD 9.7bnUSD 10.1bnUSD 10.3bn+6.1%
    Add depreciation & amortisationUSD 4.8bnUSD 5.2bnUSD 5.7bnUSD 6.2bnUSD 6.6bnUSD 7.0bnUSD 7.4bnUSD 7.7bnUSD 7.9bnUSD 8.1bn+6.1%
    Less capital expenditureUSD -4.8bnUSD -5.4bnUSD -6.1bnUSD -6.9bnUSD -7.6bnUSD -8.3bnUSD -9.0bnUSD -9.7bnUSD -10.3bnUSD -10.9bn+9.5%
    Capex, % of revenue10.3%10.7%11.1%11.5%11.9%12.3%12.7%13.0%13.4%13.8%-
    Less increase in working capitalUSD -3.1bnUSD -2.9bnUSD -2.9bnUSD -2.8bnUSD -2.7bnUSD -2.5bnUSD -2.3bnUSD -2.0bnUSD -1.6bnUSD -1.3bn-9.6%
    Free cashflow to firmUSD 3.0bnUSD 3.5bnUSD 3.9bnUSD 4.3bnUSD 4.7bnUSD 5.0bnUSD 5.4bnUSD 5.7bnUSD 6.0bnUSD 6.3bn+8.8%
    Discount factor0.95590.87360.79830.72950.66670.60920.55670.50880.46490.4249-
    Present valueUSD 2.8bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.1bnUSD 3.0bnUSD 2.9bnUSD 2.8bnUSD 2.7bn-
    Present Value Of The ForecastUSD 29.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.156Reported 1.233, pulled toward 1.0 (Blume)
    Cost of equity9.78%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 186.1bn91.6% of capital
    Total debtUSD 17.2bn8.4% of capital, book value as a proxy
    Tax rate19.2%Effective, capped at statutory
    WACC9.43%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 72.92

    62% of EV

    Forecast FCFF, final year
    USD 6.3bn
    Capex at depreciation, working capital in reinvestment
    USD 10.3bn
    Less reinvestment at g/ROIC (26.5% of NOPAT)
    USD -2.7bn
    Capitalised
    USD 7.6bn
    ROIC (WACC floor)
    9.4%
    Terminal value, undiscounted
    USD 112.1bn
    Terminal value, discounted
    USD 47.6bn
    Enterprise value
    USD 77.3bn
    Less net debt
    USD 7.6bn
    Equity value
    USD 69.7bn

    Exit at 15.4x EBITDA

    Value per shareUSD 166.45

    82% of EV

    Terminal value, undiscounted
    USD 322.5bn
    Terminal value, discounted
    USD 137.0bn
    Enterprise value
    USD 166.7bn
    Less net debt
    USD 7.6bn
    Equity value
    USD 159.1bn

    Spread between methods: 78%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.43%104.24103.32102.53101.90101.50
    8.43%87.2085.8384.4783.1181.75
    9.43%75.2274.0772.9271.7770.61
    10.43%65.6764.6863.6962.7161.72
    11.43%57.8857.0356.1855.3354.47

    Outlined: this model. Green text: above today's price of 226.18. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year9.8%6.6%24.2%
    EBIT margin21.5%16.2%41.4%
    Discount rate-9.4%4.9%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.