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- Low Risk Purchases in the Bearish Market: Salesforce
Low Risk Purchases in the Bearish Market: Salesforce
Salesforce is a leader of the CRM systems segment. Its stocks are trading at 47% off their peaks. The company continues to post strong business growth despite being in the market for a long time. It has strong financials and abilities to reward its investors. The last quarter revenue reported by Salesforce rose by 14% year-on-year to $7.8 billion, while its operational margin grew by 290 basis points to 22.7%. This is quite impressive as the company suffered because the strong Dollar undermined its revenues outside the U.S. The company’s management has also approved a buy-back program for $1.7 billion.
Management estimates the company will increase its operational margin to 25% in the next couple of years and boost its revenues to $31 billion during this fiscal year, or by 17%. Salesforce announced the cut of 10% of its staff in order to increase profitability. This is quite a common strategy in the tech sector to keep business expansion going.
The company is also active in the M&A market. The last of its acquisitions is the Slack platform that has posted revenues up by 46% during the reporting quarter. Thus, investors may have a wide variety of outstanding products as they buy CRM stocks.
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