Salesforce (CRM) Wins Air Force Contract, Where Does Fair Value Sit?

Salesforce (CRM) is back in the spotlight after the U.S. Air Force’s 441st Vehicle Support Chain Operations Squadron selected its Missionforce National Security platform to manage a US$13.5b fleet across 84,000 vehicles.

See our latest analysis for Salesforce.

Despite this contract win, Salesforce’s share price remains under pressure, with the year to date share price return down 35.6% and the 1 year total shareholder return down 36.2%. This suggests that recent negative sentiment has outweighed short term news driven moves.

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Salesforce now trades well below both its recent levels and the midpoint of published value estimates, including a roughly 50% gap to the average analyst target. Where does a reasonable view of fair value actually sit?

Most Popular Narrative: 36.2% Undervalued

According to the most followed narrative on Salesforce, a fair value of $255.90 versus the last close at $163.32 leaves a sizeable valuation gap for investors to weigh.

Start with what the market is actually saying. CRM peaked at $363 in December 2024 and now sits near $151, down about 58%, at fresh 52-week lows below every major moving average. Run that price backwards through a discounted cash flow at a 9% discount rate and it embeds roughly zero perpetual free-cash-flow growth.

Read the complete narrative. Read the complete narrative.

Want to understand why this Salesforce view leans on modest revenue growth, firm margins, and a restrained earnings multiple, yet still reaches that fair value? The full narrative spells out the cash flow path and valuation bridge that connect today’s price to that target.

Result: Fair Value of $255.90 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Salesforce still faces real pressure if customer attrition moves higher or if Microsoft’s Copilot gains traction inside large accounts and weakens its system of record position.

Find out about the key risks to this Salesforce narrative.

Next Steps

Given this mix of pressure points and potential rewards around Salesforce, it makes sense to review the numbers yourself and see how the trade off looks in your own framework, starting with the 4 key rewards and 1 important warning sign.

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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.

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