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Salesforce (CRM) stock deserves a spot on your radar. Here is why – it is presently operating within the support range ($243.82 – $269.48), prices from which it has made substantial recoveries in the past. SAN FRANCISCO, CA - DECEMBER 01: The Salesforce logo is seen at its headquarters on December 1, 2020 in San Francisco, California. The cloud-based enterprise software company announced on Tuesday that it will purchase the popular workplace-chat app Slack for $27.7 billion. (Photo by Stephen Lam/Getty Images) Getty Images Over the last 10 years, Salesforce stock attracted buying attention at this level on 6 occasions and subsequently achieved an average peak return of 23.4%. Peak Return However, is the price movement sufficient on its own? It certainly bolsters the case if the underlying fundamentals align. For CRM Read Buy or Sell CRM Stock to evaluate how compelling this purchasing opportunity may be. The stock has underperformed this year, due to slower-than-expected revenue growth as enterprise spending softened amid economic uncertainties and geopolitical pressures. However, the long-term opportunities remain robust, driven by Salesforce’s aggressive investments into AI and Data Cloud services which could help drive recurring revenue and profitability. CRM stock may fluctuate. A balanced allocation does not. Trefis’ Boston-based wealth management partner combines strategy with discipline to mitigate market volatility. MORE FOR YOU Here are some quick data points for Salesforce that should assist in decision-making: Revenue Growth: 8.3% LTM and 10.5% average over the last 3 years. Cash Generation: Almost 31.6% free cash flow margin and 21.2% operating margin LTM. Recent Revenue Shocks: The lowest annual revenue growth in the last 3 years for CRM was 8.3%. Valuation: CRM stock is trading at a PE multiple of 36.8 For quick context, Salesforce delivers customer relationship management technology and a platform that facilitates connected experiences across sectors such as financial services, healthcare, and manufacturing globally. Growth, Margins What Is Stock-Specific Risk If The Market Crashes? Salesforce is not exempt from significant declines. It dropped approximately 70% during the Global Financial Crisis, 59% in the inflation surge, and over 35% in the Covid sell-off. Even minor pullbacks, like those in 2018, saw a decline of nearly 25%. Strong fundamentals do not prevent these severe downturns when the markets turn downwards. Yet, the risk extends beyond major market crashes. Stocks can drop even when markets are performing well – consider events such as earnings reports, business updates, or changes in outlook. Read CRM Dip Buyer Analyses to discover how the stock has bounced back from sharp declines in the past. The Trefis High Quality (HQ) Portfolio, which comprises 30 stocks, boasts a history of comfortably outperforming its benchmark, which includes all three – the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this? Collectively, HQ Portfolio stocks deliver greater returns with reduced risk compared to the benchmark index; there is less volatility, as illustrated in HQ Portfolio performance metrics. Editorial StandardsReprints & Permissions
