Salesforce as a direction for long-term investments

Software company Salesforce Inc. (CRM), which supplies customer relationship management solutions, is currently trading over 40% below 52-week highs. At the auction on April 29, the stock was worth $175.94. The main reason for the decline is the general market situation. However, the Salesforce remains the leader in its IT market direction and continues to increase revenue at double-digit rates.

The Salesforce product portfolio includes several platforms, including Salesforce CRM, Slack, Tableau and MuleSoft. Each of these applications offers cloud solutions that allow customers to get a comprehensive view of customer data. Salesforce is the leader in the direction: in 2021, the company controlled 23.9% of the market, which is more than its four largest competitors — SAP, Oracle, Microsoft and Adobe — combined.

The company’s share is increasing from 19.5% in 2020 and from 16.8% in 2018. Currently, the list of Salesforce clients includes, among others, such large companies as IBM, Deloitte and Ford, each of which attracts additional resources, which should lead to an increase in revenue from subscription to licenses. There is a slight outflow of customers to Salesforce, as it is difficult for many of them to abandon the company’s services or replace them with competing solutions.

Salesforce’s revenue for the fourth quarter and for the full year increased by 26% and 25%, respectively, compared to last year. This raised the forecast to $32 billion, which is slightly higher than Wall Street’s expectations. It projected the customer relationship management software market to grow at an average annual rate of 11.1% and reach $96 billion in 2027. For comparison: this is more than double the $41 billion in 2019. Companies such as Salesforce often chosen for their funds by institutional investors, for example, Warren Buffett’s Berkshire.