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QS Research · Michael Burry's Scion Capital analyst template · 2006

Salesforce, Inc. (CRM)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case 0% · downside -36% · upside +50%

At TTM EBITDA of $12.66B (N14), the current 17.5x EV/EBITDA implies EV $221.23B; subtracting net debt $30.98B (N22-N21) gives equity $190.25B, or $231 per share (823M shares, N5), exactly today's price, so no intrinsic edge. A downside of 12x EBITDA gives EV $151.92B, less net debt $120.94B, or $146.9/share (-36%); an upside of 25x gives $316.5B EV, less net debt $285.52B, or $346.8/share (+50%). The business generates strong FCF ($15.15B, N18) and is buying back stock, but debt has risen to $39.29B (N22) and GAAP operating profit is flattening, making the current price fair rather than a margin-of-safety long. I would wait for either a better entry or clear evidence of organic reacceleration before committing.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Salesforce is a subscription-based CRM platform vendor. The FY2026 10-K positions the company around the AI-powered Agentforce 360 Platform with embedded autonomous agents and Slack as the conversational interface, versus the Customer 360 platform described in the FY2021 10-K. Reported FY2026 financials show revenue of $41.52B, operating income of $8.33B, and operating cash flow of $15.00B, up from $21.25B, $455M, and $4.80B respectively in FY2021. The company sells direct and through partners, has no customer over 10% of revenue, and has grown via acquisitions including Vlocity, Slack, and Informatica.

  2. ✓ 2. Competitive advantage

    Salesforce operates in a highly competitive, rapidly evolving and fragmented market with low barriers to entry and a broad set of competitors, including AI-native entrants. Despite this, it has grown revenue and operating income consistently from FY2021 through FY2026, and no customer accounts for more than ten percent of revenues. The sources provide evidence of scale and cash generation but do not establish a durable brand, network, or switching-cost moat; competitive risk is explicitly flagged.

  3. ✓ 3. 10-Q takeaways

    Q2 FY2027 (ended July 31, 2026) total revenue rose 11% y/y to $11.3B, but income from operations was nearly flat at $2.3B (21% margin vs 23%). Net income of $3.5B was inflated by $2.6B of strategic investment gains, mainly Anthropic. Cash and marketable securities were $11.4B, H1 operating cash flow was $8.0B, and RPO grew 11% to $66.3B; the $25B ASR repurchased 103M shares. Debt principal jumped to $39.5B from $14.5B, lifting interest expense.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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