* Note: Prices are in Million (M) USD.
Description:
Salesforce.com, Inc. is an American cloud-based software company headquartered in San Francisco, California. It provides customer relationship management (CRM) service and also provides a complementary suite of enterprise applications focused on customer service, marketing automation, analytics, and application development.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $10,928 M
Debt : $11,369 M
EBITDA : $11,296 M
Net Debt (Debt - Cash): $441 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Technology
Industry: Software - application
Based on sector, 5 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 21.46
Since Forward PE Ratio is between 20 - 25, 2 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $2,604 M
Average Revenue: $11,406 M
Revenue Converted To Free Cash Flow (%): 22.8%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 15, 3 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2025-01-31): $37,895 M
Revenue 4 Years Ago (2021-01-31): $21,252 M
Last 5 Years Average Revenue Growth: 16%
Since Revenue Growth is between 15 - 20, 4 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2025-01-31): $974 M
Share Count 5 Years Ago (2021-01-31): $930 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $12.44
Trailing 12-Month Earnings Per Share (EPS): $11.28
Average Earnings Per Share (EPS): $11.86
Dividend Per Share (DPS): $2
Payout Ratio: 14%
Dividend Yield: 1%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 2.7%
Since Average ROE is less than 10, 1 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $255
52-Week Low: $229
Threshold Price (15% Above 52-Week Low): $264
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $246,963 M
Since Market Cap is between 100B - 500B, 3 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 28 points to above Salesforce.com Inc (CRM) stock.
Last 2 Years Avg PE 34.17, Fair Value PE 25, Industry Based PE 30, Growth Based PE 15, RCFC Based PE 30.26, ROE Based PE 12.14, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 23.38. Value-Trades has assined P/E value 23.38. Since an average (Current Year EPS + Next Year EPS) earning per share is $11.86.
The fair value of Salesforce.com Inc (CRM) stock should be (23.38 x $11.86) = $277.28.
