CRM

Since AI coding agents came out, basically, the thought has been that software companies are now less valuable. There's thoughts that there could be increased competition coming very quickly. And there's also a question about whether these companies can exist in the same exact business model they do today. So companies like in it and Salesforce which I'll discuss later, these were viewed as premium companies. They traded at premium multiples cuz they're thought to be reliable subscription revenue that was going to be there in the long run continue growing. And now some investors are questioning that. But that could be the opportunity for the long-term investor.

Salesforce, ticker symbol CRM, that's also Wednesday after market close. Crowd Strike, ticker symbol CRD, that's another company reporting. That's a cyber security company. I'm going to dive in a little bit more on Salesforce here. This is the largest pure enterprise software company. It's like the mental meme of what a software as a service enterprise stock is. And of course, it sold off along with the broader SAS apocalypse narrative, although it has rebounded along with the others in recent weeks. And that's because it's looking dirt cheap. This has been a compounder in the market. Reliable subscription revenue growing 10% 15% year-over-year. Five-year keer revenue is 12.7% and the company has started generating a ton of free cash flow 14.6 billion dollars over the trailing 12 months up 15% year-over-year. And while the stock has traded off a ton, it's free cash flows at all-time highs. The company has recently started paying a dividend, but still a small payout. It's a 0.84% dividend yield. I'll be doing a full Salesforce video. That will be after the earnings report. Right now, I'm just going to give you a little preview. And my insight right now is that I think the stock is still cheap. Over the past five years, the median multiple that Salesforce has traded at, this is earnings per share, trailing 12 months, adjusted earnings per share. The median multiple is 33.43. It's currently 15.09. That means if the stock jumps back up to that, it would be an implied fair value of $463, which would be 121% upside from here. And by the way, if we go over the 10-year period, it's traded at an even higher multiple. But to be fair, in this 2016 to 2021 period, the company was growing faster on the top line and also valuations were a little more irrational then. We were in the ZERP era. But from 2022 on, the valuations have been pretty reasonable on Salesforce stock. So, it's trading well below that 5-year period. And this is true based on free cash flow, too. Based on free cash flow, Salesforce is looking super cheap.

Crowd Strike, ticker symbol CRD, that's another company reporting. That's a cyber security company. I'm going to dive in a little bit more on Salesforce here. This is the largest pure enterprise software company. It's like the mental meme of what a software as a service enterprise stock is.

And of course, it sold off along with the broader SAS apocalypse narrative, although it has rebounded along with the others in recent weeks. And that's because it's looking dirt cheap. This has been a compounder in the market. Reliable subscription revenue growing 10% 15% year-over-year. Five-year keer revenue is 12.7% and the company has started generating a ton of free cash flow 14.6 billion dollars over the trailing 12 months up 15% year-over-year.

And while the stock has traded off a ton, it's free cash flows at all-time highs. The company has recently started paying a dividend, but still a small payout. It's a 0.84% dividend yield. I'll be doing a full Salesforce video. That will be after the earnings report. Right now, I'm just going to give you a little preview. And my insight right now is that I think the stock is still cheap.

Over the past five years, the median multiple that Salesforce has traded at, this is earnings per share, trailing 12 months, adjusted earnings per share. The median multiple is 33.43. It's currently 15.09. That means if the stock jumps back up to that, it would be an implied fair value of $463, which would be 121% upside from here.

And by the way, if we go over the 10-year period, it's traded at an even higher multiple. But to be fair, in this 2016 to 2021 period, the company was growing faster on the top line and also valuations were a little more irrational then. We were in the ZERP era. But from 2022 on, the valuations have been pretty reasonable on Salesforce stock. So, it's trading well below that 5-year period.

And this is true based on free cash flow, too. Based on free cash flow, Salesforce is looking super cheap.

So look at Salesforce again. Right here. See this downtrend right here. This downtrending channel. And then now we're getting the bottom, right? The Q3 Q4 software bottom. Let's go. Right. Let's go.

Uh, Salesforce still pushing. You've got into it trying to push up intraday here a little bit uh before earnings.

An example of which might be like Salesforce. Salesforce was one of the buy alerts that we sent at about $163 per share.

CRM bottomed June.

Nvidia and Salesforce in the spotlight this week. Oh, good old earnings. Good old earnings. Salesforce will be the same day as uh as Nvidia. That'll be very interesting.

Netflix into it, Salesforce green, Service Now barely green.

CRM back Oh, look at that rejection. Wow, that's clean. That's a clean reject. Down to 209. 80 bucks on Netflix. uh into it earnings tomorrow, Salesforce and Nvidia in two days.