Salesforce Stock Has Been Accumulated Over Q3
Past performance is not an indicator of future results
Source: www.tradingview.com
Salesforce released its Q2 earnings on 25 August. This marks an important inflection point (dashed blue vertical) on the company's price chart. For most of 2021, the stock moved sideways, as did its volume (red dashed horizontal). The lower chart shows the OBV indicator, which shoots upwards, following the Q2 earnings release, as the price takes off.
Past performance is not an indicator of future results
Salesforce is the leader in the CRM industry, with approximately 20% of the market share. This is more than its next four competitors combined. The company has shown double-digit growth in revenue over the last three years, with a mean growth rate of 26%. Moreover, our forecast for 2022 sees its ROIC (derived from adjusted NOPAT, net PP&E, and working capital items) return to pre-covid levels.
Forward guidance has also been positive, with an expectation of more than doubling revenue by 2026. If ROIC improves as forecast, coupled with this forward guidance regarding revenues, there is scope for significant value creation. The market is recognising similar and, as such, the accumulation may very well continue.
Reference:
finance.yahoo.com/quote/CRM/
fool.com
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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