Buffett Brain · Research note
Score updated 23 Oct 2026
CRM· Technology
Salesforce
Salesforce's 77.7% gross margin and 21.5% operating margin highlight its strong position, but ROIC of 9.5% lags behind Buffett's criteria.
Buffett fit
Partial fit
Owner
47
Durability
95
Management
68
Price
36
Score updated 23 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of Salesforce, we'd focus on maintaining its impressive of 77.7% and of 21.5%.
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Salesforce's durability is supported by its consistent profitability over the past five years and a net margin of 18.0%.
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Salesforce has reduced its share count by -1.39% CAGR over five years, reflecting effective .
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With an earnings yield of 3.5% and yield of 6.75%, Salesforce's valuation is on the high side.
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- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
8- 177.7% is top-quintile in the tech sector.
- 221.5% exceeds the sector's 18.0% top-quintile cutoff.
- 3Net margin of 18.0% is robust for the software industry.
- 4 of $14.4B indicates strong cash generation.
Concerns
8- 1 of 9.5% is below the sector's top-quintile cutoff of 13.4%.
- 2 ratio of 28.6 suggests high growth expectations.
- 3Current ratio of 0.76 indicates potential liquidity concerns.
- 45-year EPS CAGR of 2.34% is modest given the valuation.
Price history
$250-16.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Salesforce provides CRM technology services, connecting companies and customers through platforms like Agentforce. It generates $41.53B in revenue, with a strong 77.7% and 21.5% , indicating efficient operations. The unit economics show a net margin of 18.0%, suggesting profitability despite high sector competition.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 23, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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