Should You Invest in Salesforce?

PHOTO CREDIT: Salesforce

OVERVIEW

Salesforce Incorporation is a company based in the United States. The company designs, develops, and sells customer relationship management (CRM) software for customers around the world. The company offers cloud-computing software under the Marketing, Services, Sales, and Commerce cloud. It also offers a wide range of other products. The company was founded in 1999.

Why You Should?

  1. Salesforce is a great growthplay in an investor’s portfolio. Salesforce will continue to report strong growth over the next couple of years as companies want to gain efficiencies and improve their customer relation management. Salesforce will continue to see higher demand because of these trends.
  2. Salesforce is currently the largest pure Software as a Service (SaaS) company in the world. This just comes to show that the company delivers a great product for its customers and can capitalize on the high demand for digital CRM software. In my opinion, Salesforce will continue to grow based on new acquisitions and a great product, something that I will talk more about.
  3. Salesforce offers CRM software to its customers. The company offers services under the Marketing, Sales, Service, and Commerce cloud as well as other integration with Tableau and MuleSoft. These services will help companies of all sizes improve their customer relationships and will improve profitability by making companies more efficient. This will benefit the company and investors.
  4. Salesforce has had a history of making great acquisitions. Some of these acquisitions include MuleSoft (builds integration software), Tableau (a data visualization), and most recently Slack (a communication software company). These products strengthen the company’s core business and offer new product opportunities. This will help the company grow.
  5. The COVID-19 pandemic has sped up the adoption of digital CRM software as companies shift most of their processes to the cloud. This has helped Salesforce have a record 2020, something that will only help it further grow in the years to come. This has benefited the company and its investors.
  6. The company has been reporting rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped the company grow its business, expand its product offerings, and aquire companies. This has also benefited investors in the company. In the financial year of 2021, the company reported revenues of around 21.25 billion and profits of around 4.07 billion. Both of these metrics are higher than what the company reported in the financial year of 2020 when they had revenues of around 17.1 billion and profits of around 126 million.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Salesforce faces tough competition in the CRM and cloud computing industry. Some of these competitors include Amazon, Google, Microsoft, Oracle, SAP, and many others. This competition might hurt the company and its investors in the future.

MY OPINION

I think that Salesforce is a great long-term investment due to its position as a good growth play, the positive impacts from the pandemic, a good product, its history of large aqusitions, its position as the largest Saas company, as well as its history of rising revenues and profits. However, tough competition might hurt the company and its investors.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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