Salesforce is GOAT
Salesforce released their quarterly earnings last night and it was an absolute blowout.
Salesforce ($CRM) released their quarterly earnings last night, and it was an absolute blowout. Not only did they set a revenue record at $5.1bn, but their earnings (profit) were double the consensus estimate. The stock was up +3.64% yesterday but will pop another +13% today based on the pre-market figures.
What's so Great about Salesforce?
I've built a career on Salesforce's tech, creating Europe's largest Salesforce implementation consultancy before selling it to Accenture in 2015. I know their business inside-out and can attest to the growth over the past decade. The CEO invented the term "Cloud Computing" as well as "App Store" (which he then gifted to Steve Jobs) and is a powerhouse of marketing and salesmanship. But Salesforce is not a company built with smoke and mirrors, as you can see from the 6000-ish% increase since 2004 below.
The misleading name makes people think that Salesforce makes sales software (and it does). But it also allows you to build any type of enterprise application - incredibly quickly - on their platform. These abilities have seen 150,000+ companies either transition from manual processes or legacy software to their solutions. And they keep on adding more products offerings through aggressive acquisitions adding new revenue streams. It seems almost certain that they will continue to grow for years more (watch out SAP!).
You may have also heard about the Dow Jones reshuffling its constituents and soon $CRM will be added. Most of the market hasn't realised that this shouldn't make a difference as little of Salesforce's stock will be indexed, and this misunderstanding has driven volume pushing up the price anyway! Expect this to continue, especially in light of the great earnings report.
Great, but What's in it for Me?
I've traded in-and-out of the $CRM for years but expected the lack of face-to-face sales to slow them down for the quarter gone. From their forecasts, they expected this too. Instead, businesses are "going digital" faster than ever because of the Great Lockdown. Belts are tightening. Everyone needs to do more with less, and this means automating where you can. This trend has been a boon for Salesforce, and it's not done yet.
I could kick myself for not just HODLing through the past few years. But with investing, it's often best not to dwell, and instead focus on how to deploy your learnings. In this case, my learnings are telling me one thing, BUY.
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