Salesforce: (NYSE: CRM) SaaS is one of the largest software companies in the world. His business is focused on helping customers develop: maintain good relationships with their customers.

Historically, Salesforce has been a major investment. Shares have risen 188% over the past five years, more than doubling the 91% yield of the broader S&P 500. But winners often continue to win, և Salesforce still seems like a good buy. Here’s why.

Great market opportunity

Consumers interact with businesses in a variety of ways: marketing content, online stores, sales staff, customer service agents, and more. All of these interactions generate valuable data, but the data is usually stored in different places. In other words, although sales: marketing teams can interact with the same customers, the data is stored in separate sections.

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Salesforce’s customer relationship management (CRM) platform solves that problem. It allows customers to combine sales, services, marketing and sales data, helping all business teams work together to work more efficiently. Ultimately, this translates into better customer engagement, which often leads to greater profitability.

Providing a high-quality customer experience has always been important, but with the advent of the epidemic, digital acceleration has made it even more necessary. In fact, according to a Salesforce survey, 80% of consumers think that the experience provided by the company is more valuable than the product.

Simply put, the strong need for strong customer relationships has created a great opportunity for Salesforce. Management estimates that the company’s target market by 2025. Oracle: and hole:.

Strong financial performance

Salesforce’s leading position in the CRS market has helped it grow rapidly. In fact, during the last revenue call, CEO Mark Benioff said Salesforce would make $ 50 billion a year faster than any other software company.

Metric:

2018

2021

CAGR:

Income:

$ 10.5 billion

$ 21.3 billion

26%

Free cash flow

$ 2.2 billion

$ 4.1 billion

23%

Data source: Salesforce SEC records. Note: The 2021 fiscal year ended on January 31, 2021. CAGR = complex annual growth rate.

Salesforce uses the cost-effective SaaS business model. This has kept its gross margin below the 70% average, which means that Salesforce can be an incredibly profitable enterprise as it continues to scale its business.

The healthy balance of the company is also remarkable. It owes $ 2.7 billion in long-term debt, but that figure is pale in comparison to its $ 12.0 billion in cash-market securities. That strong financial position makes Salesforce’s business flexible.

Innovative culture

In 1999, Salesforce helped lead the SaaS industry with the launch of its first cloud-based CRM software. For 20 years since then, the company’s innovative culture has helped it dramatically expand its product portfolio. And today Salesforce is as innovative as ever!

For example, Salesforce Einstein is an artificial intelligence engine that automates certain tasks and makes predictive suggestions. This helps customers work more efficiently, which increases profits more often than not. It is noteworthy that the research company Gartner recently recognized Salesforce as a leading provider of sales force automation solutions. This is possible because the International Data Corporation (IDC) estimates that global AI spending will reach $ 110 billion by 2024 (more than double the $ 50 billion spent in 2020).

Similarly, the low-end Salesforce platform allows virtually anyone to build software, even if they do not know the computer code. But the really innovative part of the platform is supporting blockchain software. Blockchain technology, best known for its record-breaking role in cryptocurrency, is a highly secure, decentralized way of data authentication, storage, and has the potential to change many industries.

These are just two examples, but the question is as follows. Salesforce’s innovative culture is a valuable asset that պահ should keep the company at the forefront of the CRM market.

Final word

Salesforce recently announced that it intends to acquire communications specialist Slack. This fits in with the company’s serial acquisition approach. Investors should pay attention to this situation. Integrating the two companies can be difficult, and if things go wrong, Salesforce’s work can suffer.

What I’m saying is that the company has successfully rolled out several major mergers in the past. Moreover, Salesforce’s huge market capability, strong financial performance and innovative culture should make it a good long-term investment in almost any scenario.

This article presents the opinion of a writer who may disagree with the position of the “official” offer of Motley Fool Premium Consulting. We are motley! Investigating an investment thesis, even our own, helps all of us think critically about investing, making decisions that will help us become smarter, happier, and richer.