Salesforce Stock Is Trading Below Its Fair Value
Salesforce stock (NYSE: CRM) has gained 35% YTD, as compared to the 2% rise in the S&P500 over the same period. Further, at its current price of $179 per share, it is trading 18% below its fair value of $219 – Trefis’ estimate for Salesforce’s valuation. The company posted better-than-expected results in the fourth quarter of FY 2023 (FY Feb-Jan), with revenues increasing by 14% y-o-y to $8.38 billion. It was driven by a 14% rise in subscription & support revenues and a 19% increase in professional services & other revenues. Notably, the subscription & support segment contributes around 90% of the top line. It benefited from a 13% rise in sales cloud, marketing & commerce cloud, and service cloud, a 15% jump in platform & other, and an 18% rise in data sub-segments. Despite positive growth in revenues, the company reported a net loss of $98 million, up from $28 million in the year-ago period. It was primarily due to a restructuring cost of $828 million and losses on strategic investments of $314 million.
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