Here's How Much a $1000 Investment in Salesforce.com Made 10 Years Ago Would Be Worth Today
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Salesforce.com (CRM) ten years ago? It may not have been easy to hold on to CRM for all that time, but if you did, how much would your investment be worth today?
Salesforce.com's Business In-Depth
With that in mind, let's take a look at Salesforce.com's main business drivers.
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics and custom application development.
Headquartered in San Francisco, Salesforce, Inc. was founded in 1999. Over the course of two and a half decades, the company has established itself as the world's leading CRM vendor with a market share of nearly 20%, according to the reports of Gartner, a global research and advisory firm. Its nearest rival, SAP is way behind at a market share of around 8%. About 90% of the Fortune 100 companies uses at least one Salesforce software.
The company has leveraged its expertise in on-demand software to increase the scale of operations. It also offers a technology platform for customers and developers to build and run business applications.
Salesforce helps companies of every size and industry to connect with their customers in new ways through existing and emerging technologies including cloud, mobile, social, IoT and artificial intelligence (AI).
Rapid digital transformation and the company’s sustained focus on aligning products with customer needs are driving the top line. Salesforce’s annual revenues have sextupled from $5.4 billion in fiscal 2015 to $34.9 billion in fiscal 2024.
There are two main revenue streams — Subscription and Support and Professional Services & Other.
Subscription revenues comprise subscription fees from customers, accessing the company’s enterprise cloud computing services (Cloud Services), software licenses and subscription fees recognized from customers for additional support. This segment accounted for more than 93% of Salesforce’s fiscal 2024 revenues.
Professional Services & Other revenues consist of fees that the company derives from consulting and implementation services and training. This segment accounted for the remaining 7% of Salesforce’s fiscal 2024 revenues.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Salesforce.com ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2014 would be worth $4,406.59, or a gain of 340.66%, as of June 28, 2024, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 179.60% and the price of gold went up 69.74% over the same time frame.
Analysts are forecasting more upside for CRM too.
Salesforce is benefiting from a robust demand environment as customers are undergoing a major digital transformation. Its sustained focus on aligning products with customer needs is driving the top line. Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned the company as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuously expanding generative AI offerings will help it tap the growing opportunities in the space. Our estimates suggest that Salesforce revenues will grow at a CAGR of 9.9% through fiscal 2025-2027. However, stiff competition and unfavorable currency fluctuations are concerns. Also, softening IT spending amid ongoing macroeconomic uncertainties could hurt its growth prospects.
Shares have gained 15.98% over the past four weeks and there have been 18 higher earnings estimate revisions for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
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Salesforce Inc. (CRM): Free Stock Analysis Report
