Could Salesforce Stock Be Worth it Long-Term?

The security has seen a dramatic pullback from its November highs

Feb 10, 2022 at 10:46 AM
facebook twitter linkedin, Inc. (NYSE:CRM) was last seen down 1.9% to trade at $217.79, likely getting hit by the broader market selloff. The stock's selloff from its Nov. 9 record high of $311.75 has been steep and unrelenting, with several bear gaps putting it at a three-month deficit of 28.1%. However, this multi-month pullback appears to have stopped short at the $207 level, which also captured a smaller mid-May selloff. 

crm feb 10

Moreover, the software company has maintained consistent sales growth in recent years, increasing its trailing 12-month revenues 18% since fiscal 2021 and 88% since fiscal 2019. However, Salesforce has struggled on the bottom line, with its trailing 12-month net income experiencing a 57% decline since fiscal 2021. Nonetheless, Salesforce is expected to see a 1.1% increase in earnings and a 20.4% increase in revenues for fiscal 2023.

From a fundamental point of view, Salesforce stock’s valuation continues to be high, with CRM trading at a price-earnings ratio of 120.54 and a price-sales ratio of 8.32. Furthermore, Salesforce stock has a forward price-earnings ratio of 47.17, which would indicate a significant improvement yet is still a rich value given the cloud software company’s output. Even so, the stock presents a viable option for long-term investors searching for a mega-cap stock with a relatively high growth rate.

An unwinding of bearish sentiment among options traders could be a boon for CRM bulls, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 50-day put/call volume ratio of 1.13, which stands higher than all other readings from the past year. In other words, long puts haven't been more popular in the last 10 weeks. 


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!