Buy Salesforce Stock
Over the past decade, I've always focused on Salesforce's free cash flow generation -- and in particular its stellar free cash flow growth on a per share basis (which factors in dilution from employee stock-based compensation and acquisitions made using new stock).
buy salesforce stock
CRM has an overall POWR Rating of B, equating to a Buy rating. You might also want to consider investing in the following Software - Application stocks with an A (Strong Buy) or B (Buy) rating: Commvault Systems, Inc. (CVLT), IBEX Limited (IBEX), and Magic Software Enterprises Ltd. (MGIC).
Rising corporate spending on digital transformation projects remains a plus for Salesforce stock. But the days of Salesforce making big acquisitions, such as its purchase of Slack Technologies, could be over.
Salesforce reported fourth-quarter earnings that topped views while its revenue outlook came in above expectations. The company announced a bigger buyback for CRM stock and touted plans to improve profit margins. Salesforce also said it has disbanded a panel that explores mergers and acquisitions, implying it will make no more big acquisitions.
Activist investor Elliott Management on Jan. 23 disclosed that it has taken a multibillion-dollar investment in Salesforce. Elliott Management joined hedge fund Starboard Value in targeting CRM stock.
Taylor's departure is the latest management shift for CRM stock. Salesforce on Aug. 8 announced the appointment of Brian Millham as president and chief operating officer. Gavin Patterson, who had been president and chief revenue officer, was shifted to chief strategy officer. Patterson left the company in early November. In addition, Stewart Butterfield, who headed the company's Slack unit, will leave Salesforce.
At an investor day in December 2020, Salesforce said it aims to double revenue to $50 billion by 2026, including a $4 billion contribution from Slack. At the same time, Salesforce stock lowered its organic revenue growth target to 19% from 20% over the next four years.
Its purchase of Exact Target in 2013 was followed by e-commerce platform Demandware in 2016, and MuleSoft in 2018. Last year, Salesforce ponied up $15.7 billion in an all-stock deal to buy data analytics firm Tableau Software.
Salesforce is one of many big-cap tech stocks to watch. Started in 1999, Salesforce went public in 2004. Benioff, who is also Salesforce's founder, worked at Oracle for 13 years before he left to start the software company.
CRM stock in 2020 was added to the Dow Jones Industrial Average. Further, it replaced Exxon Mobil (XOM) in the 30-stock benchmark. Meanwhile, CRM stock belongs to the IBD Long-Term Leaders list.
Salesforce in 2019 agreed to buy data analytics firm Tableau for $15.7 billion in an all-stock deal. Tableau provides data visualization software. In addition, it enables customers to build databases, graphs and maps using time series analytics, a technique that analyzes a series of data points ordered in time.
In 2018, Salesforce bought MuleSoft for $6.5 billion in cash and stock. MuleSoft's software automates the integration of new tools with legacy enterprise platforms and speeds application development. MuleSoft's business hit a bump in late 2021.
After forming a long cup base from September 2020 to September 2021, Salesforce stock hit an all-time high of 311.75 on Nov. 9, 2021. The stock pulled back in late 2021 as the software sector weakened.
In addition, CRM stock has an Accumulation/Distribution Rating of B. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading. The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
Salesforce's growth rates seemed stable, but they didn't impress the bulls. Its stock remains down nearly 40% this year and continues to trade at a discount to many of its cloud-based peers. Is it finally time for investors to take the contrarian view?
Lastly, Salesforce's stock looks fairly cheap at 31 times next year's earnings and four times next year's sales. Its smaller healthcare-oriented CRM peer Veeva (VEEV 2.59%), which is growing at a similar rate, trades at 40 times forward earnings and 12 times next year's sales. ServiceNow (NOW 5.71%), the cloud-based digital workflow company which is growing slightly faster than Salesforce, trades at 43 times forward earnings and 10 times next year's sales. That's probably why the value-oriented activist hedge fund Starboard Value acquired a significant stake in Salesforce this October.
Beyond profits and sales, many investors are interested in cash-flow generation metrics. In a nutshell, free cash flow is how much cash a company is generating after paying the costs of doing business. The value proposition of enterprise software stocks is that they can scale up quickly without a lot of marginal costs, and the larger CRM firms seem to prove this theory out.
When it comes to investing in tech stocks, I'm typically more inclined to invest in mid-cap, value-oriented growth stocks that are lesser-known than the cloud giants. This year's rout in tech, however, has decimated the entire sector rather indiscriminately, and appealing buy opportunities exist both in small and large caps as we look forward to a potential year-end market rebound.
For a live pulse of how tech stock valuations are moving, as well as exclusive in-depth ideas and direct access to Gary Alexander, subscribe to the Daily Tech Download. Highly curated focus list has consistently netted winning trades of 40%+.
Growth stocks have crashed. The time to buy is when there is blood on the streets, when no one else wants to buy. I have provided for Best of Breed Growth Stocks subscribers the 2022 Tech Stock Crash List, the list of names I am buying amidst the tech crash.
SAN FRANCISCO and SEATTLE, June 10, 2019 /PRNewswire/ -- Salesforce (NYSE:CRM), the global leader in CRM, and Tableau Software (NYSE: DATA), the leading analytics platform, have entered into a definitive agreement under which Salesforce will acquire Tableau in an all-stock transaction, pursuant to which each share of Tableau Class A and Class B common stock will be exchanged for 1.103 shares of Salesforce common stock, representing an enterprise value of $15.7 billion (net of cash), based on the trailing 3-day volume weighted average price of Salesforce's shares as of June 7, 2019.
Salesforce and Tableau have entered into a definitive agreement under which Salesforce will acquire Tableau in an all-stock transaction, pursuant to which each share of Tableau Class A and Class B common stock will be exchanged for 1.103 shares of Salesforce common stock, representing an enterprise value of $15.7 billion (net of cash), based on the trailing 3-day volume weighted average price of Salesforce's shares as of June 7, 2019. The transaction is intended to be tax free for Tableau stockholders (except with respect to cash for fractional shares).
Under the terms of the transaction, Salesforce will commence an exchange offer to acquire all of the outstanding shares of Tableau. The acquisition of Tableau is expected to be completed during Salesforce's fiscal third quarter ending October 31, 2019, subject to customary closing conditions, including the tender by Tableau stockholders of shares representing a majority of the Tableau common stock voting power, assuming all shares tendered or converted will be counted on a one-vote-per-share basis, and the receipt of regulatory approvals. Christian Chabot, Patrick Hanrahan and Christopher Stolte, the founders of Tableau, have all entered into an agreement with Salesforce in connection with the transaction, and have indicated that they intend to tender all of their shares in the exchange offer.
These estimates assume a close date on or about October 1, 2019, and certain assumptions related to non-GAAP tax rates. Actual results could differ materially based on the actual transaction close date. Salesforce is not currently able to prepare an accurate forecast for the full year impact of the acquisition on GAAP EPS and will not be able to do so until the purchase accounting is concluded after the transaction closes. The impact on GAAP EPS is expected to be more significant than for non-GAAP EPS due to the additional stock-based compensation charges and the impact of other various non-cash items, including amortization of acquisition-related intangibles and income tax adjustments.
Non-GAAP Financial Measures: This press release includes information about non-GAAP operating margin, non-GAAP EPS and non-GAAP tax rates (collectively the "non-GAAP financial measures"). The primary purpose of using non-GAAP financial measures is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash or non-recurring items on the company's operating performance and to enable investors to evaluate the company's results in the same way management does. Non-GAAP operating margin and non-GAAP EPS estimates exclude the impact of the following non-cash items: stock-based compensation, amortization of acquisition-related intangibles, as well as income tax adjustments. The non-GAAP tax rate estimate excludes the tax adjustments and tax consequences associated with the above excluded non-cash expense items. The method used to produce non-GAAP financial measures is not computed according to U.S. generally accepted accounting principles and may differ from the methods used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.
The exchange offer referenced in this communication has not yet commenced. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute for any offer materials that Salesforce, its acquisition subsidiary or Tableau will file with the U.S. Securities and Exchange Commission (the "SEC"). At the time the exchange offer is commenced, Salesforce and its acquisition subsidiary will file a tender offer statement on Schedule TO, Salesforce will file a registration statement on Form S-4 and Tableau will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the exchange offer. THE EXCHANGE OFFER MATERIALS (INCLUDING AN OFFER TO EXCHANGE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER EXCHANGE OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION. TABLEAU STOCKHOLDERS ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF TABLEAU SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING EXCHANGING THEIR SECURITIES. The Solicitation/Recommendation Statement, the Offer to Exchange, the related Letter of Transmittal and certain other exchange offer documents will be made available to all Tableau stockholders at no expense to them. The exchange offer materials and the Solicitation/Recommendation Statement will be made available for free on the SEC's website at www.sec.gov. Copies of the documents filed with the SEC by Salesforce will be available free of charge under the Financials heading of the Investor Relations section of Salesforce's website at www.salesforce.com/investor or by contacting Salesforce's Investor Relations department at firstname.lastname@example.org. Copies of the documents filed with the SEC by Tableau will be available free of charge under the SEC filings heading of the Investor section of Tableau's website at or by contacting Tableau's Investor Relations department at email@example.com. 041b061a72