No. of Recommendations: 8
SAP 25xFCF
CRM 15xFCF
re Salesforce---
Though valuing a firm isn't always quite so simple, it's also worth adding that their ten year average market valuation level is about 30x cash flow. Given what they might expect to make this year on that front, reversion to that multiple might lead one to expect a late 2026 price in the vicinity of $450 rather than the current $196. That's not a prediction, just if-this-then-that.
I don't really know the firm deeply beyond the obvious: great balance sheet, high profitability, still growing well. Not conventionally cheap but much cheaper than usual for them. Naively, the recent weakness seems more than anything else based on the problem that they aren't an AI poster child so the money got bored and drifted away. Like trying to survive the markets in 1999 without ".com" in your company name.
Jim
