Salesforce Stock Breakdown
Salesforce is one of the largest enterprise software businesses in the world.
Salesforce provides customer relationship management CRM software that connects businesses with potential customers. The business offers a range of software products which include sales, forecasting, document storage, analytics, communication and more. The business also has an app development platform where businesses can build custom apps for their own business and customers as well as learning management software.
Salesforce was founded in 1999 and is still run by former Oracle employee Marc Benioff in San Francisco, CA. Salesforce was one of the first businesses to adopt the cloud service model, Platform as a Service, as well as the business development App store.
Salesforce has made a number of key acquisitions that fit into their overall suite of software products.
- Sales Cloud
- CPQ & Billing
- Service Cloud
- Field Service
- Marketing Cloud
- Experience Cloud
- Analytics Cloud
- Salesforce Platform
- Commerce Cloud
- Industry Cloud
- NetZero Cloud
- Safety Cloud
- NFT Cloud
Salesforce operates in the broader CRM software technology space. The goal of CRM software is connect businesses with customers faster, better and longer.
Salesforce is the most widely adopted CRM software on the market. The industry continues to grow in the US and globally, expected to hit $170 Billion by 2030.
They have many large and well funded competitors including Microsoft, SAP, Oracle, Hubspot and more. Any company that provides sales or marketing services is a competitor to Salesforce. Salesforce has branch out their platform into many different areas taking aim at many well establish software providers like Microsoft.
Total Shares Outstanding
2021 = 919,000,000
2020 = 893,000,000
2019 = 770,000,000
Vanguard Group = 79,345,967 = 7.97
Blackrock = 69,085,012 = 6.94%
Fmr = 48,977,216 = 4.92%
T. Rowe Price = 46,707,038 = 4.69%
State Street = 44,239,852 = 4.45%
Marc Benioff = 27,761,368 = 2.79%
Morgan Stanley = 19,070,817 = 1.92%
Geode Capital Management = 16,569,006 = 1.67%
Fisher Asset Management = 15,674,961 = 1.58%
Jennison Associates = 13,478,130 = 1.35%
Institutional Ownership = 70.19%
Insider Ownership = 3.35%
Market Capitalization = $153,690,000,000
5. Revenue and Net Income
This moment EPS = 1.51
Revenue = $21,250,000,000
Net Income = $4,070,000,000
Revenue = $17,100,000,000
Net Income = $126,000,000
Revenue = $13,280,000,000
Net Income = $1,110,000,000
6. Balance Sheet
Cash and Cash Equivalents = $10,537,000,000
Total Debt = $15,290,000,000
Total Assets = 66,301,000,000
Total Liabilities = 24,808,000,000
7. What could go right
More businesses continue to move to an online presence. Salesforce will continue to acquire profitable businesses to add to its offerings. The brand name of the business will drive more external users and customers to the Salesforce platform activating the network effect and increase the value of the platform.
The more services that Salesforce adds to its platform the more revenue they can generate from cross selling.
The technology industry continues to grow at a steady pace and Salesforce rides the wave up. This business also has room to expand internationally.
Globally sales and marketing spending by businesses also directly impact Salesforce. Businesses need sales to continue growth and as that increases so will the value and revenue of this business.
8. What could go wrong
Salesforce has a LOT of well funded competition. Salesforce has the advantage of being one of the first cloud service providers and specializing in sales and marketing, but the major technology players as well as some smaller ones are now fully in the cloud and looking to take marketshare away from Salesforce. Google, Microsoft, SAP, Oracle all offer cloud services that overlap with Salesforce.
Salesforce prices are more expensive than some smaller competitors and this could lead some businesses to jump ship over to the competition.
Salesforce has become such a powerful brand that it will rise and fall with the global economy. If there is a total economic recession this will hit the revenue of this businesses as businesses look to cut costs.
Salesforce is not afraid to make acquisitions. This has been beneficial so far, but if they start to pay too much for businesses or purchase a bad company this could tarnish the brand.
CRM has a market cap of about $150 Billion. This is not nearly as high as Apple, Microsoft or Google. But it is still not a cheap stock by any means.
CRM has a history of consistently growing revenue each year. They have made some expensive, but also smart product acquisitions that they have folded into their core product. They were wise to start on the cloud early and create a platform where people could develop software on their platform.
In 2021 they had reached 150,000 customers. From the largest to the smallest businesses on earth.
The valuation dramatically went up during Covid and has dramatically come down since. But it looks like revenue continues to climb.
The business does not pay a dividend. Salesforce recently announce a $10 Billion stock buyback program that should help boost the stock price.
Salesforce is a growth story.
I am more interested in being a long term owner of this stock. It appears like it is still in revenue growth mode while also being profitable. I also like that it is founder run and they have made smart acquisitions over time.