CRM salesforce-Let’s talk about the popular salesforce.com, inc. (NYSE:CRM). The company’s shares received a lot of attention from a substantial price increase on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on salesforce.com’s outlook and valuation to see if the opportunity still exists.
Is salesforce.com still cheap?
According to my valuation model, salesforce.com seems to be fairly priced at around 5.75% above my intrinsic value, which means if you buy salesforce.com today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $149.68, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because salesforce.com’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from salesforce.com?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. salesforce.com’s earnings over the next few years are expected to increase by 67%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.