This cloud-based software company continues to post double-digit growth
Selling power (RCMP 1.86% ) has posted impressive earnings and growth in recent quarters. In this video clip from “The Virtual Opportunities Show” on Motley Fool live, recorded on February 8Fool contributor Jose Najarro gives a detailed report on the company’s current operations and plans for the future.
Jose Najarro: The company I’m going to talk about is Salesforce. For those unfamiliar with Salesforce, it is a company that focuses on CRM, i.e. customer relationship management. If you are any business, you want to collect data on what your customer does, where he buys, how much he buys, where he buys the most, what time he bought? That’s who you usually go with. Selling power.
They also do a lot of other things outside of customer relations. Let me share my screen with the presentation. I installed here. Let me set this up. Let me do a quick share screen. Salesforce, for example, they touched many products. For example, in the third quarter they had about, I think it was over $6.5 billion in revenue. They take care of sales services. As I mentioned, customer relations in sales, you want to see how your customers react, what is the best way to sell with them. They also have other platforms and others. They recently acquired Slack. A few quarters ago they have platforms like Slack. They also have a lot of visualization products. They work in services like marketing, e-commerce, and then data analytics.
We can see that the two biggest players are undoubtedly the sales department and the service departments. We can see in their last quarter all strong double digits, even big revenue hogs for them. The little ones are definitely getting stronger. We can see platforms, things with their recent acquisition with Slack, growing about 51% year over year.
One place I would definitely recommend is checking out their investor relations. They have all the different products that suit them. You can click on it and see other solutions available to them. If we can take a quick look at their last quarter. First, fourth quarter results are expected to be released on March 1, 2022 after market close, in about a little less than a month.
I also want to show some of the updates to some of the things they do. On February 1, they added more solutions to their security cloud. Right now with COVID, something that companies are very difficult to deal with is, if we’re testing for employees, if we’re testing for customers to some degree, how do we keep that data safe? How do we ensure that we not only keep this data safe, but use it correctly?
They are augmenting their products in their security cloud to help mitigate and manage better things like testing, like health and entry protocols to create safer in-person experiences at events and workplaces . Imagine if you’re a company that maybe runs a lot of gigs, for example, you might want to use Salesforce, use that security cloud platform to make sure you’re using the best tools to make sure that’s a sure event.
Jan 13, one thing I love about Salesforce is that if you check out their investor relations, they share a great deal of knowledge of the overall market. One thing they see is that consumers continue to increase the number of purchases they make online. One of the markets they’re really focused on right now is making sure companies have strong products to be able to take advantage of this digitalization still within the market.
They are working on tools to improve the future of e-commerce, allowing businesses to improve their systems and develop more flexible digital strategies. Just a quick look at third quarter earnings. Revenues for this last quarter increased by 27%. They also gave indications for the whole of 2022, and it will be growth of around 24% year-over-year. They raised again and again their forecast for the whole year. Salesforce seems like a solid company. They also have a positive cash flow from operations of around $400 million, and they launched revenue for the first quarter of fiscal 2023, which they expect to be around 21 at 22%. It is a pleasant and profitable business in the form of operating cash flow also growing strongly.
Finally, they are in a strong emerging market. I know, metrics, I think aren’t the best thing to look at quickly, but sometimes I look at them just to see historical levels. It doesn’t really tell me, hey, buy or sell. It just tells me hey, how are you doing compared to the previous times. Forecast EV/EBITDA ratio from Salesforce. Right now sitting around 21.99 I believe most of the big tech, if we take a look at the top 5 tech companies right now, they’re in the 25 year highs. It doesn’t seem like it’s completely overrated.
Right now, Salesforce has taken quite a hit. Over the past year, it’s down about 10%. This one, I think, is a very, very boring undertaking. We don’t hear too much about it. These are just my general thoughts on Salesforce for now. It’s quite an interesting company, I really like the market it’s in. Not one of which I am a shareholder. But now with the current slowdowns, so I wouldn’t mind doing a little more research in the future.
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