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Stockchase Discover SalesForce.com Inc. CRM-N PARTIAL BUY Jun 13, 2023

Allan Tong’s Discover Picks

CRM is another big tech stocks comeback story, rallying 20% in the past year, but 65% year-to-date after plunging to end 2022. Activist investors have been driving cost cutting to beef up profit margins rather than raise sales growth. The results: Q1 revenues topped estimates, operating margins improved and the company raised the July revenue forecast from $8.49 billion to $8.52 billion. Something is working. Add to this momentum, CRM throwing their hat into the Generative AI ring with Einstein and AI Cloud. The new tech can help enterprise clients craft emails, service briefings, case summaries and work orders. Read 3 Big Tech Stocks Making a Comeback for our full analysis.

$208.980

Stock price when the opinion was issued

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BUY

It just reported a strong top and bottom line beat and raised their full-year forecast. They remain tops in enterprise software.

WATCH

On the fence on this name. Back in the day it was a high-growth software company, but now lower growth (which happens as you get bigger). Recent deal is fine. But activists had identified ways to eke out more profit, company said no more M&A, and now it's back to M&A.

Also, he's waiting for more durability in the software AI story, which is slowly coming together. Wait and see, better ideas elsewhere right now.

WAIT

Beat, raised, doing a (really accretive) acquisition at a reasonable multiple. Earnings were flat YOY, but revenues were up 7.6%. Reducing headcount by 10%. Guiding to 8-9% revenue growth. 

Dominant player. A stock you have to own, but has to be at the right price. (He's cheap, he wants to get it at a better price ;) Trades at 20x PE for 2027, with 13%. Better places to put capital to work. Try for 5-10% lower.

TOP PICK

A leader in software it is also a pioneer in staff models. It is evolving into an operating system for more modern enterprises and AI. It has a good valuation at 22 X earnings and she sees 36% upside. Through its share buybacks and dividends it is providing good shareholder returns. Although it is down 23% year-to-date she gives it a 9 out of 10.         Buy 51  Hold 10  Sell 2

(Analysts’ price target is $353.69)
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

CRM is building cash reserves, aggressively buying back shares and retiring debt.  It trades at 4x book and supports a 10% ROE.  It manages its platform efficiently and is well positioned for an improving economy.  We recommend setting a stop-loss at $183, looking to achieve $352 -- upside potential of 32%.  Yield 0.3%

(Analysts’ price target is $352.14)
WEAK BUY

He targets $325. It's puzzling that has lagged the market. They tried really hard with Einstein to bring out the agentic AI, but they discovered it needs some human intervention. Great management and aggressive sales and marketing. Is among his top 12 holdings.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Jun 17/25, Up 1.1%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with CRM is progressing well.  To remain disciplined, we recommend trailing up the stop (from $183) to $252 at this time.  

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Jun 17/25, Down 4.7%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with CRM has triggered its stop at $252.  To remain disciplined, we recommend covering the position at this time.  

BUY

They've suffered because the results of their AI spend hasn't happened yet. It's starting to now. CRM dominates the market and doesn't face serious competition. She is seeing the enhancement in their software, which will result in better earnings.

BUY

CRM is like Uber in the $60s. Their last earnings were great. The CEO will focus on free cash flow and margins and growth. The market is completely missing this, expecting some sort of AI to take over what CRM is doing. Absurd. CRM is already using AI. Is unloved, caught in the hedgefund shorts. This can easily rally 20% after earnings.