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Salesforce.com Inc CRM

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Morningstar’s Analysis

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5-Star Price

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Economic Moat

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Capital Allocation

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Salesforce Tops Expectations; Margin Performance Bodes Well Long-Term; FVE up to $292

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

We are raising our fair value estimate for wide-moat Salesforce to $292 per share, from $273, based on quarterly strength and higher guidance, and continue to see shares as undervalued. The company reported strong fiscal second-quarter results, including upside to both revenue and non-GAAP EPS guidance. Salesforce’s third-quarter revenue guidance was robust while full-year targets were raised once again. The Slack acquisition closed in the waning days of the quarter and did not have a material impact on results. Management remains bullish on the pipeline when viewed from any angle and believes margin improvements are sustainable after normalizing for recent acquisitions. Customer conversations continue to grow increasingly strategic, which continues to drive larger deals.

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Company Profile

Business Description

Salesforce.com provides enterprise cloud computing solutions, including Sales Cloud, the company’s main customer relationship management software-as-a-service product. Salesforce.com also offers Service Cloud for customer support, Marketing Cloud for digital marketing campaigns, Commerce Cloud as an e-commerce engine, the Salesforce Platform, which allows enterprises to build applications, and other solutions, such as MuleSoft for data integration.

Contact
415 Mission Street, 3rd Floor, Salesforce Tower
San Francisco, CA, 94105
T +1 415 901-7000
Sector Technology
Industry Software - Application
Most Recent Earnings Jul 31, 2021
Fiscal Year End Jan 31, 2021
Stock Type Aggressive Growth
Employees 56,606

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