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Globe and Mail
22-07-2025
- Business
- Globe and Mail
Salesforce vs. HubSpot: Which CRM Stock Is the Smarter Buy Now?
Salesforce, Inc. CRM and HubSpot, Inc. HUBS are two of the most recognized names in customer relationship management (CRM) software. Both are cloud-based platforms that help businesses attract, convert and retain customers. However, they serve different ends of the market. Salesforce is the dominant force among large enterprises, while HubSpot is making strong inroads with small and mid-sized businesses (SMBs). As investors search for sustainable winners in enterprise tech, a deeper look into each company's fundamentals, growth outlook and valuation helps determine which of these CRM stocks offers stronger long-term potential. Salesforce: CRM Giant but Slowing Growth Warrants Caution Salesforce continues to dominate the CRM market, outpacing rivals like Microsoft, Oracle and SAP. Over the years, Salesforce has built a strong and interconnected platform. The acquisition of Informatica, Zoomin and Own Company shows its intent to move beyond its position as a CRM software maker and become a broader enterprise software provider focused on artificial intelligence (AI), data and collaboration. AI is now central to Salesforce's growth plan. Since rolling out Einstein GPT in 2023, the company has embedded generative AI into its platform to help businesses automate processes, improve decisions and offer better customer experiences. As AI adoption rises across industries, Salesforce is well-placed to benefit from the same. Its latest innovation, Agentforce, reflects that momentum. Paired with its Data Cloud, Agentforce has already hit $100 million in annualized revenues just two quarters after launch. More than 4,000 customers are using it for various tasks in sales, service and marketing. Data Cloud is also expanding fast, with annual recurring revenues growing more than 120% year over year. Salesforce's broader strategy of bringing apps, data and AI agents under one umbrella gives it a strong edge. However, Salesforce's biggest challenge right now is slowing sales growth. For years, the company has delivered double-digit revenue increases. However, that pace has now cooled to single digits. In the first quarter of fiscal 2026, revenues rose just 7.7% from a year ago, and non-GAAP earnings per share (EPS) grew by only 5.7%. This slowdown reflects cautious enterprise spending amid economic uncertainty and geopolitical pressures. Analysts anticipate that this trend will persist, with mid-to-high single-digit revenue growth expected for fiscal 2026 and 2027. Non-GAAP EPS is expected to grow at a low double-digit rate for the two fiscals. HubSpot: A Fast-Moving Player in the CRM Market HubSpot has carved out a strong position by focusing on ease of use, affordability and a highly integrated platform tailored for smaller and mid-sized businesses. Its all-in-one offering for marketing, sales, customer service and content management is driving financial performance. In the first quarter of 2025, the company's revenues and non-GAAP EPS increased 15.7% and 5.9%, respectively, on a year-over-year basis. HubSpot is also investing heavily in AI features, workflow automation and advanced reporting to appeal to larger mid-market customers. This strategic positioning gives HubSpot a lot of room to expand, especially as more SMBs digitize their sales and customer operations. Additionally, HubSpot's App Marketplace offers a customer-centric solution by making it simple for companies to find and seamlessly connect and integrate solutions to grow their businesses. As companies prioritize a digital-first approach, it is likely to create more opportunities for developers to build new integrations that support every stage of the customer journey. Analysts' estimates for the top and bottom lines suggest that HubSpot is likely to grow at a faster pace than Salesforce. The Zacks Consensus Estimate suggests mid-teen percentage growth for 2025 and 2026 revenues. Non-GAAP EPS is forecasted to rise in the mid-teen percentage range for 2025 and in the low 20s for 2026. HUBS' Premium Price: Worth Paying for the Growth? On the valuation front, HubSpot trades at 8.75 times forward sales compared to 5.84 times for Salesforce. While HubSpot looks more expensive, its higher growth momentum justifies the premium. Salesforce's lower valuation reflects its risks, including slowing sales growth and macroeconomic headwinds. Conclusion: HUBS Is the Better Pick Right Now Both Salesforce and HubSpot are strong companies with good business models, but they are at different points in their growth paths. Salesforce is more mature and is facing growth challenges, while HubSpot continues to grow at a steady pace. For long-term investors who want consistent performance, HubSpot looks like the smarter investment choice today, even at a higher valuation. Currently, HubSpot sports a Zacks Rank #1 (Strong Buy), making the stock a must-pick compared to Salesforce, which has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Salesforce Inc. (CRM): Free Stock Analysis Report HubSpot, Inc. (HUBS): Free Stock Analysis Report
Yahoo
30-05-2025
- Business
- Yahoo
Salesforce vs. Adobe: Which Cloud Software Stock Has an Edge?
Salesforce, Inc. CRM and Adobe Inc. ADBE are two well-established leaders in the cloud software space. Both companies help businesses improve customer engagement, boost productivity and support digital transformation. Adobe is better known for its tools for creatives and marketers, while Salesforce leads in customer relationship management. Recently, both firms have been betting big on artificial intelligence (AI) to drive future growth. This raises an important question for investors: Which of the two stocks has a better upside potential? To answer that, let's examine their latest results, business strategies, valuation levels and risks. Salesforce continues to dominate the customer relationship management market, outpacing rivals like Microsoft, Oracle and SAP. According to Gartner, it still holds the largest share in this segment. Over the years, Salesforce has built a strong and interconnected platform. The acquisition of Informatica, Zoomin, and Own Company shows its intent to move beyond its position as a customer relationship management software maker and become a broader enterprise software provider focused on AI, data and collaboration. AI is now central to Salesforce's growth plan. Since rolling out Einstein GPT in 2023, the company has embedded generative AI into its platform to help businesses automate processes, improve decisions and offer better customer experiences. As AI adoption rises across industries, Salesforce is well-placed to benefit from the same. Its latest innovation, Agentforce, reflects that momentum. Paired with its Data Cloud, Agentforce has already hit $100 million in annualized revenues just two quarters after launch. Over 4,000 customers are using it for various tasks in sales, service and marketing. Data Cloud is also expanding fast, with ARR growing over 120% year over year. Salesforce's broader strategy to bring apps, data and AI agents under one umbrella gives it a strong edge. However, revenue growth has slowed. In the first quarter of fiscal 2026, Salesforce's revenues increased 8% year over year, well below the double-digit pace in the previous years. This isn't due to company issues, but cautious enterprise spending amid an uncertain macroeconomic environment and rising tariffs. Still, adjusted EPS rose 6%, and Salesforce remained profitable and operationally sound. Adobe had a solid first-quarter fiscal 2025, with revenues rising 10% to $5.71 billion and non-GAAP EPS growing 13.4% to $5.08. It continues to generate strong margins with an operating margin of 47.5% in the first quarter and delivered a record $2.48 billion in operating cash flow. Adobe remains the leader in creative software, with a loyal customer base and a broad range of products. AI is also a growth driver here. Adobe's AI-related business added more than $125 million in ARR last quarter and is expected to double by the end of the year. The company is expanding its AI lineup through tools like GenStudio and Firefly Services, designed to help marketers and agencies create campaigns more efficiently. It recently introduced new Firefly-powered tools in Premiere Pro and After Effects, including video expansion and 3D motion design features. Adobe is also upgrading tools like and enhancing Acrobat, Reader, and Express with AI assistants. Adobe plans to monetize Firefly through tiered pricing inside Creative Cloud. It is also increasing sales efforts to target businesses, schools and government clients. These developments suggest that Adobe is serious about scaling its AI-driven business. Nonetheless, Adobe's second-quarter guidance raises some red flags. It expects non-GAAP EPS between $4.95 and $5.00, down from the first quarter despite projecting higher sequential revenues. This signals margin pressure, likely from higher research & development spending, expanding cloud infrastructure for AI, and updates to product bundles and sales strategy. Wall Street analysts seem more confident about Salesforce's earnings stability. Over the past 60 days, the Zacks Consensus Estimate for Salesforce's next two quarters' earnings has remained unchanged. Image Source: Zacks Investment Research On the other hand, Adobe's earnings estimates for the same period have been lowered. This suggests some concerns about near-term profitability. Image Source: Zacks Investment Research In the long run, Salesforce's earnings are expected to witness a CAGR of 12.7%, slightly better than Adobe's 12.4%. While the gap is minor, it supports the idea that Salesforce has a better profitability outlook. Salesforce stock has performed much better over the past year, gaining 26.7%, while Adobe shares have lost 7.5%. This performance gap reflects stronger investor confidence in Salesforce's growth story. Image Source: Zacks Investment Research From a valuation perspective, Salesforce also appears cheaper. It trades at 6.32 times forward sales, while Adobe trades at a higher 7.17 times. This suggests Salesforce has more room for upside, assuming its fundamentals hold steady. Image Source: Zacks Investment Research Salesforce and Adobe are both strong players in cloud software, but Salesforce looks like the better option right now. Its focus on AI, unified platform strategy, and more favorable earnings outlook give it a clear advantage. Adobe is growing and profitable, but rising costs and higher valuation may limit short-term gains. Meanwhile, Salesforce is showing faster progress in building enterprise-scale AI capabilities. Currently, Salesforce holds a Zacks Rank #3 (Hold), which also puts it ahead of Adobe's Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Salesforce Inc. (CRM) : Free Stock Analysis Report Adobe Inc. (ADBE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Globe and Mail
24-05-2025
- Business
- Globe and Mail
Is Salesforce Stock (NYSE:CRM) a Buy, Hold, or Sell?
Salesforce (CRM) is betting big on AI-driven CRM tools, using Einstein GPT and Agentforce to improve customer interactions and streamline workflows. Further, CRM is expanding tailored offerings for finance, retail, healthcare, and manufacturing, making its platform more useful. According to TipRanks AI analyst, CRM stock scored 83 out of 100 with an Outperform rating. Let's explore Salesforce's outlook and opinion on Wall Street. Confident Investing Starts Here: CRM Stock's Bullish Case According to TipRanks AI analyst, Salesforce stock's score reflects strong financial performance and a positive earnings call which reflects strong growth, bottom line, and strategic product expansion. Among the positive factors, analysts see potential in Agentforce, CRM's AI automation tool, to help grow the company's market reach. Also, it is expected to open new revenue streams and drive sustainable growth in the low-to-mid teens range. Further, Salesforce is poised to benefit from the rising digitization trend in businesses, thanks to its robust cloud offerings and cutting-edge AI tools like Agentforce. While technical analysis shows an uptrend, valuation concerns persist due to its high P/E ratio. However, despite industry-specific hurdles, CRM's market strength and AI-driven strategy continue to support a positive outlook. Is CRM a Buy, Hold, or Sell? Turning to Wall Street, CRM stock has a Moderate Buy consensus rating based on 31 Buys, eight Holds, and three Sells assigned in the last three months. At $356.54, the average Salesforce stock price target implies a 25.8% upside potential. See more CRM analyst ratings Disclaimer & Disclosure Report an Issue
Yahoo
14-05-2025
- Business
- Yahoo
Salesforce Stock Soars 13% in a Month: Time to Hold or Book Profits?
Salesforce, Inc. CRM has seen its share price soar 13.5% over the past month. This surge has significantly outperformed the broader Zacks Computer and Technology sector, which gained 11.3% during the same period. Image Source: Zacks Investment Research This outperformance raises the question: Should investors book profits and exit or continue holding the stock? Salesforce's recent rally stemmed from broader market optimism. Progress in U.S.-China trade negotiations has been boosting market sentiment since late April. Protracted trade tensions had previously dampened global economic forecasts and corporate earnings expectations due to tariffs and retaliatory measures. Earlier this week, the United States and China reached a deal to slash tariffs temporarily. The United States has agreed to lower its overall tariffs on Chinese imports to 30% from 145%. On the other hand, China will reduce duties on U.S. imports to 10% from 125%. The new adjustments will be effective for 90 days. The recent trade deal suggests easing tensions between the two largest economies and smoother international trade flows. This improved outlook fostered investor confidence, leading to a rally in the equity market as fears of further economic disruption subsided and prospects for global growth seemed brighter. Apart from Salesforce, this broader market optimism also boosted share prices of other enterprise software makers, including Oracle Corporation ORCL, Microsoft Corporation MSFT and SAP SE SAP. Over the past month, shares of Oracle, Microsoft and SAP have soared 21.2%, 16.4% and 10.6%, respectively. Salesforce's long-term growth potential, along with invigorated investor optimism, makes the stock worth holding at the moment. Salesforce remains the undisputed leader in the field of customer relationship management ('CRM') software. The company continues to outpace competitors such as Microsoft, Oracle and SAP, holding the largest market share, according to Gartner's rankings. This dominance isn't fading anytime soon. Salesforce has built an extensive ecosystem that integrates seamlessly across enterprise applications. Its acquisitions — such as Slack and, more recently, the Own Company — demonstrate a long-term strategy of expanding its footprint beyond CRM into enterprise collaboration, data security and artificial intelligence (AI)-driven automation. AI is a key part of Salesforce's growth engine. Since launching Einstein GPT in 2023, the company has embedded generative AI capabilities across its entire platform, allowing customers to automate workflows, enhance decision-making and improve customer interactions. As generative AI adoption accelerates across industries, Salesforce is positioned to capitalize on this trend. Another long-term tailwind is rising global spending on generative AI. Gartner estimates that worldwide generative AI spending will hit $644 billion in 2025, implying a 76.4% year-over-year increase. Enterprise software, a key segment for Salesforce, is expected to grow even faster, with a projected 93.9% increase. Even if economic conditions slow down spending in the short term, digital transformation remains a top priority for businesses, ensuring steady demand for Salesforce's solutions. Despite the recent rally, Salesforce shares are trading at a discounted valuation multiple compared to the Zacks Computer – Software industry. The stock currently trades at a forward 12-month price-to-earnings (P/E) multiple of 25.24X, below the industry average of 31.77X. Image Source: Zacks Investment Research While Salesforce's long-term prospects shine brightly, the company faces significant near-term challenges. Revenue growth has decelerated from its historical double-digit pace to single-digit increases in recent quarters. This slowdown reflects cautious enterprise spending amid economic uncertainty and geopolitical pressures. Analysts anticipate that this trend will persist, with mid-to-high single-digit growth expected for fiscal 2026 and 2027. Image Source: Zacks Investment Research The slowdown highlights a shift in enterprise behavior, with businesses favoring smaller, incremental projects over large-scale digital transformations. For Salesforce, this means recalibrating its approach to maintain relevance in a changing IT spending environment. Salesforce remains a dominant player in enterprise software with strong positioning in AI and the CRM software market. Its current valuation is reasonable, and long-term tailwinds like AI adoption and digital transformation continue to support the growth story. Though slowing sales growth remains a major concern, the company is expected to witness a strong recovery once the macroeconomic and trade environment improves. So, for investors with a long-term view, holding the stock is the right move. CRM carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report Salesforce Inc. (CRM) : Free Stock Analysis Report SAP SE (SAP) : Free Stock Analysis Report Oracle Corporation (ORCL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
