Our coverage:

Salesforce.com (CRM): Is Acquiring MuleSoft (MULE) A Dumb Move?

Carla Olson | 2:37 pm ET, 21 Mar 2018

The acquisition of MuleSoft (MULE) by Salesforce (CRM) for around $6.5 billion is the largest in Salesforce’s  history. 

This may be expensive, but it’s strategic.  It enables CRM to compete with its chief rivals such as Microsoft Corporation (MSFT) and Oracle Corporation (ORCL).

How so? With its integration capabilities, Mule Soft can help Salesforce migrate competitor workloads to the Salesforce platform.  A particular target for this effort is Oracle.  While Oracle might have neglected its Marketing Cloud acquisitions, Salesforce is ready to take that business away from it.  

Mule Soft has manifested rapid growth through a 58% year-over-year surge in its revenue in 2017. The integration software maker has renowned brands as its customers (e.g., Coca-Cola, Mc Donald’s and Barclays).

Salesforce’s revenue will increase immediately after the acquisition, but not materially. But this aggressive step will help CRM achieve the $20B target by 2022.

How should you react as a Salesforce investor?  The acquisition should not fundamentally change your thinking.  Although expensive, it also has a lucrative upside. 

According to Finstead research, CRM’s average price target is comparable to its current price (visit Finstead.com and type "CRM price target").

Salesforce's long-term growth potential is evident from its constant effort in business expansion through strategic acquisitions and investments.

Over the last year, CRM returned +50.93%. This return is higher than Application Software sector (31.82%), Technology industry (22.52%), and S&P 500 (14.47%) returns.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Salesforce.com: Sales Cloud Defying Gravity

Carla Olson | 6:50 pm ET, 22 Nov 2017


Salesforce delivered third-quarter results that beat market expectations, as the company continues to deliver strong growth across all product verticals and geographies.  Many of the topics discussed at Salesforce’s annual Dreamforce event earlier this month showed up in these results, including outsize international growth and consistent operating margin expansion. 

The biggest delight is that European revenue rose more than 45% and adjusted operating margin expanded more than 350 basis points.  Third-quarter revenue rose 25% versus the prior-year period to $2.7 billion.   Salesforce continues to be one of the most attractive profitable growth stories in software.  

Salesforce’s oldest product, Sales Cloud, continues to enjoy reaccelerated growth behind innovations such as Einstein-driven artificially intelligent features and new products such as Financial Services and Healthcare Cloud.  Sales Cloud revenue rose 17% versus the prior-year period.  Sales Cloud is a crucial driver of Salesforce’s growth engine, as it often serves as the opening salvo when Salesforce lands net new customers, and frequently yields strong sell-through of Salesforce’s other premier cloud offerings. The longer Sales Cloud can fuel the new customer pipeline, the more durable Salesforce’s profitable growth trajectory will be.  

COO Keith Block echoed this sentiment, intimating that more and more customers are evaluating multiple clouds at once, driving switching costs.

Over the last month, CRM has returned 7.81%. This return is higher than Technology Sector (0.45%), Application Software Industry (2.92%), and S&P 500 (0.85%) returns.


Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Salesforce.com Inc (CRM) Buy or Sell Stock Guide

Updated at: 4:04 am ET, 12 Jun 2019

Are you looking for the analysis of Salesforce.com Inc (CRM) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 6 reasons to buy and 5 reasons to sell CRM stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about CRM stock:

  • Is CRM a buy or a sell?
  • Should I sell or hold CRM stock today?
  • Is CRM a good buy / investment?
  • What are CRM analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy CRM stock:

1. Software as a service is among the fastest methods for enterprises to cut costs in the IT infrastructure.

2. Salesforce.com is far and away the largest pure-play SaaS vendor in the world, producing subscriptions revenue several times larger than peers Workday and ServiceNow.

3. The firm has successfully expanded into a number of fast-growing verticals to prop up long-term revenue growth, including marketing, analytics, application development, and the Internet of Things.

4. CRM quarterly revenue growth was 25.80%, higher than the industry and sector average revenue growth (5.34% and 5.21%, respectively). See CRM revenue growth chart.

5. CRM average analyst rating is Strong Buy. See CRM analyst rating chart.

6. CRM average analyst price target ($183.15) is above its current price ($150.15). See CRM price target chart.

Now that you understand the bull case, let’s look at the reasons to sell CRM stock (i.e., the bear case):

1. There is still some trepidation for some industry verticals in moving applications, data, and sensitive information to the cloud. Salesforce.com does not offer hybrid or on-premises solutions to mitigate these concerns.

2. Microsoft, Oracle, SAP, and others will continue to invest heavily in cloud-based services, which could stunt Salesforce.com’s growth rate.

3. Salesforce.com leverages several third-party data centers, limiting the amount of oversight the firm can have on its infrastructure and representing a potential security vulnerability.

4. CRM profitability is declining. The YoY profit margin change was -0.92percentage points. See CRM profitability chart.

5. CRM Price/Sales ratio is 8.83, and it’s high compared to its industry peers’ P/S ratios. See CRM forward Price/Sales ratio chart.

Now let's look at the key statistics for CRM:

Metrics CRM
Price $159.30
Average Price Target / Upside $183.53 / 15.21%
Average Analyst Rating Strong Buy
Industry Software - Application
Sector Technology
Number of Employees 35,000
Market Cap $122.39B
Forward P/E Ratio 61.3497
Price/Book Ratio 8.7995
PEG 3.0719
Revenue (TTM) $14.01B
YoY Quarterly Revenue Growth 19.56114530371956%
Profit Margin 8.279800142755175%

What are your thoughts on CRM?

If you liked this analysis, check out Buy or Sell Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Try Finstead: the fastest way to get market data and insights on stocks, ETFs, mutual funds, and cryptocurrencies