John M. Chase My Thesis At today's price levels, Salesforce, Inc. ( NYSE: CRM ) stock seems to be an interesting pick to invest in for the medium to long term, given the company's free cash flow development, margins, prospective growth rates, and valuation contraction amid all that.
I believe that the market's recent negative reaction to Salesforce's 1Q FY2025 revenue miss is a classical overreaction, with the market making global conclusions from just a few data points - that's why I think investors should buy the dip in CRM's stock. My Reasoning Salesforce is a $240-billion market cap firm that sells CRM software in the cloud, which encompasses Sales Cloud, Service Cloud, Platform, Marketing and Commerce Cloud, and Integration and Analytics. According to the business description, Salesforce has grown to include mobile, social networking, analytics, and artificial intelligence.
Salesforce distributes its software on a subscription basis as well through third-party channels, with 33% of its sales originating from outside the United States. Over the past 10 years, the company's revenue has grown at a CAGR of almost 24%, while the free cash flow has increased even more rapidly, at a CAGR of 32.3%.
Meanwhile, CRM's EPS has grown at a CAGR of 37.1%, making the company one of the fastest-growing entities even within its high-tech cybersecurity industry. Unfortunately, 1st quarter of the fiscal year 2025 results release led to a significant drop in CRM stock price, with a decline o.