For years,
Salesforce $CRM forced its way into hypergrowth with ambitious acquisitions (
$WORK was its largest, at almost $30bn) and aggressive spending, as exemplified by its annual Dreamforce. Its stock price rose in tandem, especially when topline growth was the key selling point for software companies in the markets.
Now,
sentiment has shifted, and profitability—or at least the ability to prove substantial operating leverage—has become a main stock price driver.
The Salesforce today is shaping a different narrative. Gone are the aggressive hiring,
over-generous perks, and lax cost controls: Amid a weaker demand environment, management’s primary focus is to drive down costs as hard as possible to surprise on margins. Just look at the latest cashflow and profitability trends below.
Please click on the
link below for my review of Salesforce
$CRM latest Q2 2024 results, and thoughts on their current valuation. Do you think Salesforce is a GARP and would therefore quality as a "a wonderful company at a fair price," to borrow a line from Warren Buffett?