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NYSE:CRM
They report a super report last time, yet nobody cared. Maybe it's due to them still needing to close the Slack deal. Be careful. They report Thursday.
It passes the Rule of 40: Revenue growth rate + EBITDA margin. If the sum is greater than 40, the company passes. This means, the company can get away with rapid revenue growth and no profitability, or slower revenue growth and high profitability--two ways to win. A senior growth name, though it hasn't been a high-flyer in a long time. It trades at less than 10x sales, but has been stuck in a holding pattern ever since buying Slack late last year. You can buy this for the long-term.
The Slack acquisition isn't not liked by many, but the CEO is one the best acquirers around, so he thinks it will pay off.
They've bought a lot of businesses, including Slack. How will they integrate it? Some integrations haven't worked. To compete with Micorsoft in teams and office products, CRM needs to acquire more businesses in coming quarters and even years. This is the big point. The stock may be volatile. That said, CRM has grown very aggressively in recent years. He expects a pullback in coming quarters due to hiccups in acquisitions.
Investor day is coming this Tuesday. Contrary to the street, he thinks the Slack deal made sense. Slack products are terrific and SF needs them to go toe to toe with Microsoft. Slack is a serious company that just reported a fine quarter, though nobody paid attention. Salesforce has a good record in takeovers. The CEO knows what he's doing.
Great software company as we move to the cloud. Dominate their sector. A great hold. You could probably buy and hold and make money. He holds Twilio instead.