2024-04-02 08:00:00 ET
Summary
- In light of a +35% jump in CRM stock over the last four months, Salesforce's long-term risk/reward has shifted drastically.
- Today, we will review Salesforce's valuation and recent business performance.
- I am downgrading the Company from a "Buy" to a "Hold".
Introduction
In late November 2023, I reiterated my bullish view on Salesforce, Inc. ( CRM ) at ~$220 per share ahead of its Q3 FY-2024 earnings report, citing improved business fundamentals and reasonable valuation:
As of now, Salesforce is trading slightly above our fair value estimate of $222 per share. However, CRM's expected five-year CAGR of 17.8% handily exceeds our investment hurdle rate of 15% and long-term S&P 500 returns of ~8-10%. Therefore, Salesforce is a solid "Buy" at current levels under our valuation methodology.
Earnings tend to bring volatile price swings with Mr. Market free to react in either direction. However, given Salesforce's attractive long-term risk/reward, I'm a buyer of CRM stock ahead of the Q3 FY2024 earnings release.
Read the full article on Seeking Alpha
For further details see:
Salesforce: Too Far, Too Fast (Rating Downgrade)