Salesforce and Workday Are Both Down More Than 30%: Is Either SaaS Stock a Buy?

Key Takeaways

• Salesforce stock trades at 11x forward earnings and Workday stock at 10x, both near multi-year lows after selloffs exceeding 30% from their peaks.
• TIKR’s model targets around $291 for Salesforce stock at roughly 15% annualized versus around $194 for Workday stock at roughly 12%, a gap that reflects Salesforce’s more mature margin profile.
• Salesforce stock’s operating margins have reached 22-24%, while Workday stock’s have climbed from 5% two years ago to 13% today, with significantly more runway ahead.
• The Rule of 40 scores Salesforce at roughly 35 and Workday at roughly 26, with Workday’s score improving faster.

Pull up Salesforce stock and Workday stock side by side on TIKR to see how their valuation multiples have compressed over the past year, for free →

How Salesforce and Workday Make Money, and Why Both Stocks Are Down More Than 30%

Salesforce (CRM) stock and Workday (WDAY) stock have both lost more than 30% from their highs, bringing two of the most recognizable names in enterprise software to valuations not seen in years.

Salesforce makes the software companies use to manage their customer relationships, tracking sales pipelines, service tickets, and marketing campaigns in one platform, and has spent the past two years layering AI agents branded Agentforce on top of that foundation.

Workday makes the software companies use to manage their employees and finances, covering payroll, workforce planning, and accounting, and has similarly begun embedding AI into its core products to automate routine HR and finance tasks.

Both businesses run on the subscription model that defines modern enterprise software, where customers sign annual contracts, renew at high rates, and tend to expand their spending over time, making revenue unusually steady and predictable quarter to quarter.

The difference between them is not what they do but where they are in the margin journey.

Salesforce stock has already run the playbook, with operating margins climbing from roughly 20% two years ago to 22-24% today and gross margins anchored at 77-78%.

Workday stock is running the same playbook from an earlier stage, with operating margins rising from just 5-9% two years ago to 10-13% today, meaning the operating leverage that CRM investors already captured still lies ahead of WDAY investors.

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Salesforce vs Workday: Growth, Margins, and the Rule of 40

A useful way to assess a subscription software business is the Rule of 40, which adds a company’s revenue growth rate to its operating margin to produce a single health score, with anything above 40 signaling a well-balanced business.

Salesforce stock’s most recent quarter shows 13% revenue growth and a 22% operating margin, producing a Rule of 40 score of roughly 35.

Meanwhile, Workday stock’s most recent quarter shows 14% revenue growth and a 13% operating margin, producing a score of roughly 26.

Salesforce stock clears a higher bar today, but Workday stock’s score has improved dramatically from roughly 18 two years ago when operating margins were in the mid-single digits, and the trajectory points toward the mid-30s as margins continue expanding.

Revenue growth at both companies is running in the 12-14% range and holding steady, with neither accelerating sharply nor decelerating into distress.

The profitability gap is the more important dimension, with Salesforce stock generating $2.43 in operating income per quarter against $11.13 in quarterly revenue, while Workday stock generates $0.34 in operating income against $2.54 in quarterly revenue.

Gross margins tell a similar story, with CRM at 77-78% and WDAY at 75-76%, close enough that the structural economics are comparable but with Salesforce stock having converted significantly more of that gross profit into operating income.

Salesforce Stock and Workday Stock Are Trading at Three-Year Valuation Lows

One way to check whether a selloff has created a genuine bargain is to compare where a stock trades today against where it has traded historically on the same metrics.

Salesforce stock’s NTM P/E sat at 24x in April 2025 and has compressed to 11x today, with NTM EV/EBITDA falling from 16x to 9x over the same period.

On the other hand, Workday stock’s NTM P/E has fallen from 29x in April 2025 to 10x today, with NTM EV/EBITDA compressing from 20x to 8x.

Both businesses generate gross margins above 75%, grow revenue at double-digit rates, and operate in markets where customers rarely leave, the kind of profile that historically commands premium multiples rather than single-digit EBITDA multiples.

By that standard, the current prices represent a meaningful departure from how the market has valued these businesses for most of the past two years, and the compression has happened while the underlying financials have continued improving.

What CRM and WDAY Stock Could Be Worth by 2031

TIKR’s model values Salesforce stock at approximately $291 by January 2031, implying around 94% total return from the current price of approximately $150, or roughly 15% per year.

Salesforce stock’s path to that target rests on the margin discipline already demonstrated, with 77% gross margins compounding into higher operating income as revenue grows at 11-13%, and on Agentforce gaining commercial traction as an upsell that lifts revenue per existing customer without proportional cost increases.

Salesforce stock appears undervalued at current levels, with a 77% gross margin business now trading at 9x forward EBITDA while growing revenue at 13%.

Meanwhile, TIKR’s model values Workday stock at approximately $194 by January 2031, implying around 71% total return from the current price of approximately $113, or roughly 12% per year.

Workday stock’s path to that target runs through the operating leverage the income statement already shows in early innings, with operating margins tripling from 5% to 13% over two years and the mid-case assuming continued expansion toward 28% net income margins as the cost base scales more slowly than revenue.

Workday stock appears undervalued at current levels, with operating margins still early in an expansion that has already tripled from where it started.

TIKR’s model gives Salesforce stock a roughly 3 percentage point annual return advantage over Workday stock, 15% versus 12%, a gap that reflects Salesforce’s more mature margin profile and higher absolute profitability today.

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Should You Invest in Salesforce or Workday?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Salesforce stock and Workday stock and you’ll see years of historical financials, what analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down for both companies.

You can build a free watchlist to track Salesforce and Workday alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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