Is Salesforce Stock a Good Buy Today? Salesforce Stock Analysis $CRM | Summary and Q&A

TL;DR

This video analyzes Salesforce's business fundamentals, revenue breakdown, acquisition of Slack, and provides a fair value calculation for its stock.

Key Insights

• 🐕‍🦺 Salesforce's primary revenue comes from subscriptions, with professional services accounting for a smaller portion.
• 🥺 The acquisition of Slack significantly increased Salesforce's Goodwill, which could potentially lead to impairments in the future.
• 🥶 The charts demonstrate consistent growth in revenue and free cash flow for Salesforce over the years.

Transcript

hi I'm Jimmy in this video we're doing a deep dive on Salesforce ticker symbol CRM so this video is part of our Dow 30 series where we're analyzing all 30 companies in the Dow Jones Industrial Average we started with Walt Disney and moving right down the list next up we've got Procter Gamble and basically what we're going to do is we're going to lo... Read More

Questions & Answers

Q: What are the primary revenue sources for Salesforce?

Salesforce generates revenue from subscriptions and professional services, with subscriptions accounting for 93% of total revenue in 2023.

Q: What does the acquisition of Slack mean for Salesforce?

The acquisition of Slack for $26 billion significantly increased Salesforce's Goodwill, but the high premium paid over Slack's revenue raises concerns about potential write-downs in the future.

Q: How does Salesforce's revenue and free cash flow performance look over the years?

The charts show a positive growth trend in both revenue and free cash flow for Salesforce, indicating a strong financial performance.

Q: What is the fair value of Salesforce's stock according to the discounted free cash flow analysis?

Based on a nine percent required rate of return, the fair value of Salesforce's stock is estimated to be around $162 per share.

Summary & Key Takeaways

• The video takes a deep dive into Salesforce, analyzing its revenue structure and key business segments, including subscriptions, professional services, and platform solutions.

• The revenue and free cash flow charts show a significant growth trend for Salesforce over the past decade.

• The acquisition of Slack for $26 billion raises concern as it poses a risk of potential impairments to Goodwill, a large portion of Salesforce's assets.