Salesforce, Inc. CRM is scheduled to release first-quarter fiscal 2027 results on May 27.
For the fiscal first quarter, the company expects total revenues between $11.03 billion and $11.08 billion (midpoint at $11.055 billion). The Zacks Consensus Estimate for first-quarter revenues is pegged at $11.06 billion, which indicates an increase of 12.5% from the year-ago quarter’s reported figure.
CRM anticipates non-GAAP earnings per share in the band of $3.11-$3.13 for the first quarter. The consensus mark for non-GAAP earnings has remained unchanged at $3.12 over the past 60 days, which indicates a 20.9% increase from the year-ago quarter’s level.
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Salesforce’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 11.6%.
Salesforce, Inc. Price, Consensus and EPS Surprise
Salesforce, Inc. price-consensus-eps-surprise-chart | Salesforce, Inc. Quote
What the Zacks Model Unveils for CRM
Our proven model predicts an earnings beat for Salesforce this time. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.
Earnings ESP: Salesforce has an Earnings ESP of +1.40% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CRM currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Influence Salesforce’s Q1 Results
Salesforce appears well-positioned to report strong first-quarter results, driven by its strategic focus on digital transformation and cloud solutions. With businesses globally undergoing digital overhauls, Salesforce's commitment to aligning its product offerings with customer needs is likely to have boosted its revenues for the quarter.
The growing demand for generative AI-enabled cloud solutions has been a major catalyst for Salesforce. By embedding generative AI tools across its products, the company not only enhances customer engagement but also strengthens its competitive position in the customer relationship management space. This forward-thinking approach might have significantly contributed to its top-line growth during the to-be-reported quarter.
Salesforce’s ability to deepen relationships with leading brands across industries and expand its reach in key geographic markets remains a cornerstone of its growth strategy. The company’s increasing footprint in the public sector is likely to have provided a further boost, unlocking new growth opportunities during the first quarter.
The acquisitions of Waii, Convergence.ai and Zoomin have been pivotal in enhancing Salesforce's capabilities and diversifying its revenue base. These additions are likely to have driven higher subscription revenues, particularly across its core cloud services.
The ongoing cost restructuring initiative is likely to have boosted Salesforce’s profitability in the first quarter. The company’s fourth-quarter fiscal 2026 non-GAAP operating margin expanded 110 basis points to 34.2%, mainly driven by the benefits of cost restructuring initiatives, which include the trimming of the workforce and a reduction in office spaces.
CRM’s Stock Price Performance & Valuation
Year to date, Salesforce shares have plunged 32.1%, underperforming the Zacks Internet – Software industry’s decline of 13.2%. Compared to its peers, CRM stock has also underperformed other enterprise software makers, including Oracle Corporation ORCL, Microsoft Corporation MSFT and SAP SE SAP. Year to date, shares of Oracle, Microsoft and SAP have declined 2.6%, 12.9% and 27.1%, respectively.
Salesforce YTD Price Return Performance
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Now, let’s look at the value Salesforce offers investors at the current levels. CRM stock is trading at a discount with a forward 12-month P/E of 12.95X compared with the industry’s 26.43X.
Salesforce Forward 12-Month P/E Ratio
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CRM stock also trades at a discounted multiple compared with Oracle, Microsoft and SAP. At present, Oracle, Microsoft and SAP have P/E multiples of 23.79, 21.97 and 19.86, respectively.
Investment Thesis on Salesforce Stock
Salesforce remains the global leader in customer relationship management, a position it has consistently held, according to Gartner. However, the company is no longer just a customer relationship management software provider. Rather, it is evolving into a full-scale enterprise platform.
Salesforce is building a broader enterprise ecosystem centered on AI, data and collaboration. Acquisitions like Slack and Informatica highlight this ambition, while smaller AI-focused deals such as Doti AI and Spindle AI show management’s urgency in staying ahead of the curve.
AI is now central to Salesforce’s growth story. Since the 2023 rollout of Einstein GPT, Salesforce has been embedding generative AI across its offerings to help companies automate processes, improve decision-making and strengthen customer relationships.
Its latest innovation, Agentforce, is gaining momentum. Combined with Data Cloud, these AI-driven offerings brought in $2.9 billion in recurring revenues in the fourth quarter of fiscal 2026, representing more than 200% year-over-year increase. Agentforce alone generated $800 million in recurring revenues, up 169% year over year. More than 60% of Agentforce deals came from existing clients, showing Salesforce’s success in cross-selling AI features to its user base.
Conclusion: Buy CRM Stock Ahead of Q1 Results
Salesforce’s leadership in customer relationship management and aggressive AI expansion creates a solid foundation for sustained growth. Its ability to deliver earnings growth despite ongoing macroeconomic uncertainties makes the stock worth buying. An impressive earnings surprise history and a lower valuation multiple than the industry also suggest that CRM is a solid investment option right now.
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This article originally published on Zacks Investment Research (zacks.com).