Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Salesforce, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 11.1% to 11.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 124, DPO 30, DIO 60). At a 9.1% WACC with mid-year discounting, the terminal value (92% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 23.1x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $164.87 per share, suggesting CRM is fairly valued by 11.1% at the current price of $185.44.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2027 | 2028 | 2029 | 2030 | 2031 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 5,945 | 6,513 | 7,159 | 7,835 | 8,766 | 8,985 |
| (−) Net Interest | 227 | 249 | 274 | 300 | 335 | 343 |
| (+) D&A | 701 | 751 | 805 | 891 | 1,016 | 1,041 |
| EBITDA | 6,873 | 7,513 | 8,237 | 9,025 | 10,117 | 10,370 |
| (−) Tax | 1,534 | 1,681 | 1,847 | 2,022 | 2,262 | — |
| (−) CapEx | 971 | 1,064 | 1,170 | 1,280 | 1,432 | — |
| (−) ΔWC | 2,263 | 1,585 | 1,804 | 1,887 | 2,602 | — |
| Free Cash Flow (FCF) | 2,105 | 3,184 | 3,416 | 3,837 | 3,821 | — |
| Peers' EBITDA Multiple | 23.1x | |||||
| Terminal Value | 239,136 | |||||
| WACC / Discount Rate | 9.13% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,015 | 2,793 | 2,746 | 2,826 | 2,579 | 154,531 |
| Enterprise Value | 167,491 | |||||
| Projection Period | 12,959 | 7.7% | ||||
| Terminal Value | 154,531 | 92.3% | ||||
| (−) Current Net Debt | 9,849 | |||||
| Equity Value | 157,642 | |||||
| (÷) Outstanding Shares | 956M | |||||
| Fair Price | $165 | -11.1% | ||||
| WACC \ EV/EBITDA Exit Multiple | 19.1x | 21.1x | 23.1x | 25.1x | 27.1x |
|---|---|---|---|---|---|
| 7.1% | $150 | $166 | $181 | $197 | $212 |
| 8.1% | $143 | $158 | $173 | $187 | $202 |
| 9.1% | $137 | $151 | $165 | $179 | $193 |
| 10.1% | $131 | $144 | $157 | $171 | $184 |
| 11.1% | $125 | $137 | $150 | $163 | $176 |
Current price: $185.44. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.