$CRM a favorite tech play

13 мая 2022 г.

CRM has strong fundamentals and has currently slightly undercut its bottom trend after overshooting on the previous rally. Along with being at the bottom of its trend at a strong price volume support area I believe this is one of the best secure growth/value plays out there. CRM has a very sticky customer base and is growing at a rapid rate. While on the surface they look expensive at a 111PE ratio this is an illusion since like Amazon in the early days they reinvest their profits to avoid large tax burdens and to fuel growth. eg. in the last year their net income was only 1.44 billion but spend about 11 billion on sales and marketing. If you look at their profitability before the reinvestment into marketing they are trading near a 15 PE ratio.

From some rough projections I have I think it would be reasonable for them to reach a $100 billion revenue by 2030 and could likely achieve a net margin of 25-30% which could give their a value of at least a $500 billion market cap at around a 17PE.