- 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.
For further details see:
Salesforce: Enough Is Enough, Time To Buy