CRM - Salesforce: Enough Is Enough Time To Buy

• Salesforce has corrected more than 40% with concerns on guidance on M&A, and the sell-off looks overdone, in my view.
• Salesforce has a solid business model with recurring and sticky revenues, with visibility into revenue to be recognized in the next 12 months and after.
• Salesforce continues to benefit from strong industry tailwinds with continued growth in digital transformation spend of 15% CAGR and improving on its #1 market share position in the CRM space.
• As Salesforce continues to grow steadily in revenues, its profitability and free cash flows growth is likely to accelerate as it pulls multiple levers to improve earnings and cash flows.
• I initiate Salesforce with a strong buy given the compelling risk reward opportunity. My 12 month target price for Salesforce is $288, implying 70% upside from current levels.

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