Entering text into the input field will update the search result below

Salesforce: Hard To Find A Better Investment

May 02, 2022 1:59 PM ETSalesforce, Inc. (CRM)75 Comments
Eugenio Catone profile picture
Eugenio Catone


  • Salesforce is #1 CRM in the world for the eighth year in a row with an increasingly overwhelming dominance.
  • The structure of this business model is very advantageous, especially in the expansionary phases of the economic cycle.
  • From the first day Salesforce was born, Marc Benioff had decided that profitability and philanthropy would be the main pivots of this company.
  • According to the parameters entered, Salesforce's fair value is $304.90 while the current price is $175.

Salesforce To Purchase Popular Messaging Platform Slack For 27 Billion

Stephen Lam/Getty Images News

Investment thesis

Within the stock markets, it is very difficult to find great companies at a cheap price because usually these companies are bought by many investors eager to become their shareholders. For a great company to be

This article was written by

Eugenio Catone profile picture
A business administration graduate, when I can I express my opinion on Seeking Alpha about financial markets and individual companies.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (75)

Heavy Moat Investments profile picture
I'm long CRM, but your DCF is not accounting for dilution, a large headwind for CRM.
Woke company added to Dow in place of AA+ rated Exxon---typical---look at the performance between this overpriced CRM stock vs still underpriced Exxon--not even close.

Lets see how CRM fairs into 4th quarter tax loss selling ---$85?
GDPPP profile picture
@CJlove4all I think CRM is tech's version of Valeant Pharma.. just gobbling companies left and right to show that 20% revenue growth every quarter. It will only work for so long IMO.
colorado buff profile picture
@GDPPP I agree that they bought companies and aren’t making that much profit yet and they need to stop acquiring. The reality is they will get to 40% market share and if the new ceo can clean up the balance sheet and income statement patient investors will be rewarded. I am holding here and will definitely add if drops significantly
you really have to be high. I can find a ton of investments way better than one that sports 35x earnings and has trouble growing ORGANICALLY. Good luck w this until it reaches 100.
Blooming Capital profile picture
Have you ever looked at their numbers through GAAP measures? They don't look so rosy.
@Darcy Norton do go on😉
who even uses this company?.. this feels like something my grandparents would use.
@DomL did you just ask who uses Salesforce? Slack? Tabeleu?
Almsot every single company I work with.
colorado buff profile picture
@DomL lol. They have a 23% market share against good competition and pretty much grew from 20 to 23% in the last couple years. They will hit 40% before they are done and be the dominant player
Folger profile picture
@DomL My Fortune 100 company uses Salesforce for most of our customer service applications. The big difference w/ SF over its competitors, is that CRM has a core set of basic applications and relatively easy to use dev tools to customize them.

BTW, you must be awfully young to say your grandparents use cloud based computing.
pcprincipal profile picture
Cramer loves this company, just as he loves (loved) Roblox, Chewy, and every other crash and burn company.
CRM replaced Exxon in the DOW---look at the difference in performance since the announcement

@CJlove4all momentum works both ways
An entire generation of entrepreneurs & tech investors built their entire perspectives on valuation during the second half of a 13-year amazing bull market run. The "unlearning" process could be painful, surprising, & unsettling to many.
Murad Shawar profile picture
@Sergio10 Sounds like someone who missed out on a good 7 plus years of bull market have fun missing the next bull market
Steve Kean profile picture
@Murad Shawar sounds like someone new to investing.
Murad Shawar profile picture
@Steve Kean 5 years isn’t new . You sound like someone who thinks like a value investor and think you can get growth at 20PE
great company. i'll start buying when p/e = 20
Murad Shawar profile picture
@Sergio10 youll never buy it friend and thats fine stock to Colgate and KO that seems more your speed
@Murad Shawar I only have goog and berkshire hathaway. You cant go broke in the next 10 years with these 2. Good luck with CRM, i just copied the comment from twitter, sorry if it was offensive. I just feel 100 pe is too expensive. Best,
@Murad Shawar This aged well since 5/7....and KO & CL pay dividends...
What about buybacks?
Eugenio Catone profile picture
@artster No buyback is planned currently
Blooming Capital profile picture
@artster @Sergio10 This company only buys other companies and dilutes shareholders. They don't pay shareholders. 23 years old 55 acquisitions tracxn.com/...
@Darcy Norton And no GAAP earnings...???
Energy-Investor profile picture
The analysts say buy, but the technicals say sell. It's hard to get around the high trading multiples.
Eugenio Catone profile picture
@Energy-Investor I don't think it can go down forever considering how solid their business is. I see any further decline as one more reason to buy at a discount.
colorado buff profile picture
@Eugenio Catone they will eventually be at 40% market share. They went from 20 to 23 pretty quickly against some great companies
vend2804 profile picture
With Slack and Mulesoft $CRM will be soon running hot. Big enterprises love SalesForce. No other CRM tool can come closer.
GDPPP profile picture
CRM is a risky stock even after a 40% drawdown from it's ATH. In the previous bull market, they've been growing topline through acquisitions while diluting shareholders. If Slack turns out to be a flop and they have to do a write-off (thereby taking on massive goodwill), then watch out below!!
arok79 profile picture
@GDPPP i agree. People see the big drop from the ATH and assume its a buy. Headwinds are real. I think there is much more downside coming. Not touching it at current levels.
Eugenio Catone profile picture
@arok79 If you had read the article you would have realized that the reason I think Salesforce is worth investing in is not simply because it's down 40%. There are hundreds of other companies that are down 40% right now but I haven't bought them.
3.1% free cash flow yield
ROIC 2.4%

You are having a hard time finding a better investment?
arok79 profile picture
@apischke the author is a noob. He thinks those are good numbers heheh
@arok79 Insults aren't necessary , but if you need something to do, why don't you calculate ROIC for CRM for 10 & 20 year intervals.

Slack is not as much of a speculation as the thumbs down crowd alleges. It had a rapidly growing user base when it was acquired. It is an accretive, plug-in acquisition that gives CRM's users a way to become more efficient by enabling time-tested team collaboration mechanisms.

It will take a while to do the backend work. No doubt CRM will roll out enhancements. There are a lot of very smart (& loyal) folks at this company. This acquisition involved a lot of due diligence.

Salesforce already provides a lot of features its competitors lack. It's taken many years to refine the Slack platform. CRM's competitors just thought they were sucking hind tit.
arok79 profile picture
@jarratta Should be able to handle the good with the bad. If I triggered you or you're too sensitive to handle it I apologize.
This is a compelling analysis. Thanks for the excellent insight.

In addition to its dominant (& ever-growing market share), CRM enjoys a huge degree of lock-in with its customers. No competing product is nearly as good so switching costs are exorbitant. Very little churn. This product is embedded in the workflow of a large percentage of huge companies as well as SMBs.

I've waited two decades for this opportunity. Scooping up as much as I can.
Eugenio Catone profile picture
@jarratta Thank you, I hope you found this article helpful.
colorado buff profile picture
@jarratta I just doubled down
colorado buff profile picture
@Eugenio Catone I did thanks.
There are plenty of other better investments! Hogwash! :-(
@magenta17 what are the investments you would suggest?
Eugenio Catone profile picture
@magenta17 Yeah, Tesla and Bitcoin so in 2 months you're rich
pcprincipal profile picture
Another overpriced Cramer “buy buy buy” loser.
longmoneyvinz profile picture
@pcprincipal Agree, i would buy CRM aswell but the EPS Growth isnt justifying the P/E.
@quaresma7 Like AMZN, CRM doesn't give hoot about PE. It cares about CFLW and continuously improving its value to its customers.

The integration of the Slack collaboration platform will be huge. Once that is accomplished, millions of users will be able to do most of their workflow from their CRM acct.

This is a security for investors who are patient. Traders have many richer opportunities.
arok79 profile picture
@jarratta the Slack acquisition is still a toss up if will bear the fruit they thought it would. If it turns out to be a flop oh man is this stock overpriced. You will see sub $100 stock price real quick.
It should be a good stock but there are no Buyers
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About CRM

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on CRM

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.