Salesforce EPS Surges 183.7% Over Three Years Despite 41% Share Drop
CRM•Salesforce shares have fallen 41% over the past year while GAAP EPS compounded 183.7% annually over three years on a 10% revenue CAGR. Operating margin rose from 9.2% to 20.5% and share count dropped 11.4%, yet the stock’s price-to-sales multiple sits at 3.2, below its 10-year low of 3.8.
1. Stock Performance and Earnings Growth
Salesforce shares declined 41% over the past year even as GAAP EPS compounded at an annual rate of 183.7% over the last three years on a modest 10% revenue CAGR. This divergence highlights a shift from top-line focus to bottom-line efficiency as the primary growth driver.
2. Margin Expansion and Share Repurchases
Operating margin has more than doubled over three years, climbing from 9.2% to 20.5%, reflecting improved profitability and cost control. Concurrently, share repurchases reduced the share count by 11.4%, amplifying earnings per share for remaining shareholders.
3. Valuation and Market Implications
Despite strong EPS growth and margin gains, the stock trades at a price-to-sales multiple of 3.2, below its ten-year low of 3.8. This valuation disconnect suggests the market remains fixated on slowing revenue growth rather than the company’s accelerating bottom-line momentum.
