CRM - Embedded Expectations Analysis - 2020 05 06
salesforce.com, inc. (CRM:USA) currently trades near recent highs relative to UAFRS-based (Uniform) earnings, with a 47.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about the Tableau integration, their Customer 360 business plan, and solutions for governmentsSpecifically, management may lack confidence in their ability to execute their Customer 360 vision and 2021 business plan and serve the interests of all stakeholders. In addition, they may be exaggerating their ability to generate Salesforce-related jobs globally, the resilience of their business during economic crises, and their focus on providing solutions to the government. Management may also have concerns about Tableau integration issues
Salesforce.Com is engaged in customer relationship management technology. The company's Customer 360 is an integrated platform that unites sales, service, marketing, commerce, integration, analytics and more to give companies a single, shared view of their customers. Through its platform and other developer tools, the company also enables third parties to develop additional functionality and applications, or apps, that run on its platform, which are sold separately from or in conjunction with the company's service offerings. The company's cloud service offerings include sales cloud, service cloud, marketing and commerce cloud, and salesforce platform and other.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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