Is Salesforce Stock A Buy Before Earnings? Why I'm Buying

Nov. 22, 2022 6:58 PM ETSalesforce, Inc. (CRM)12 Comments

Summary

  • Salesforce is the original SAAS stock and has become a mature tech company.
  • Salesforce generates positive GAAP free cash flow and is still growing revenues at a double-digit pace.
  • While macro conditions will impact the near term, management has given ambitious FY26 targets including a 17% revenue CAGR.
  • The stock is still too cheap here - I reiterate my buy rating.
  • Looking for a portfolio of ideas like this one? Members of Best Of Breed Growth Stocks get exclusive access to our subscriber-only portfolios. Learn More »

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Salesforce (NYSE:CRM), long seen as the pioneer of the entire software as a service (‘SAAS’) industry, has seen great volatility amidst the tech stock crash. Unlike some other tech stocks, CRM never saw its valuation bid up to bubbly

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revenue and margins

FY23 Q2 Presentation

disaggregation of revenue

FY23 Q2 Presentation

cash and equivalents

FY23 Q2 Presentation

guidance

FY23 Q2 Presentation

earnings result

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earnings expectation

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multi-cloud customers

2022 Investor Day

multiple-cloud advantages

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FY26 targets

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operating leverage

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consensus estimates

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M&A track record

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share repurchase program

2022 Investor Day

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This article was written by

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Julian Lin is a top ranked financial analyst. Julian Lin runs Best Of Breed Growth Stocks, a research service uncovering high conviction ideas in the winners of tomorrow. 

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Disclosure: I/we have a beneficial long position in the shares of CRM either through stock ownership, options, or other derivatives. 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.

Additional disclosure: I am long all positions in the Best of Breed Growth Stocks portfolio.

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