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General information
salesforce.com, inc. designs and develops enterprise software. The Company supplies a customer relationship management service to businesses worldwide providing a technology platform for customers and developers to build and run business applications. Clients uses salesforce.com to manage their customer, sales, and operational data.
  • Good financial results growth rate 20.9% (average between last period year over year growth for revenue and EBITDA), there is slowdown compared to average historical growth rates (45.4%)
  • Dividend yield for the last twelve months 0.0%
  • Free cash flow yield 1.2% (LTM)
  • Share price is 138.8% higher than minimum and 15.2% lower than maximum for the last 3 years
  • The company is undervalued by EV / LTM EBITDA multiple compared to target level (61.5x vs 72.2x)
  • Fundamental value created in LTM (estimate) 7.8%
Key Financials
Ticker: CRM
Share price, USD: 238.43
Common stocks: 887 000 000

Dividend Yield:  0.0%
FCF Yield LTM: 1.2%
EV / LTM EBITDA: 61.5x
Last revenue growth (y/y):  28.9%
Last growth of EBITDA (y/y):  13.0%
Historical revenue growth:  27.1%
Historical growth of EBITDA:  63.7%
Target EV / EBITDA (hist 75% percentile): 72.2x
Express share price potential: 22.9%
Fundamental value created in LTM: 7.8%
EV / LTM EBITDA mutiple calculation
Market Cap ($m): 211 487
Net Debt ($m): -3 436
EV (Enterprise Value): 208 051
EBITDA LTM ($m): 3 384
EV / LTM EBITDA: 61.5x

Revenue and EBITDA

Quarterly values ($m)

Change (y/y)

Cash Flow

Free Cash Flow ($m)

Net Debt / Cash and Equivalents ($m)

Share price and dividends

Share price

Payment USD per share

Multiple and potential

EV / LTM EBITDA and 75% percentile

Potential dynamics

Value Creation

Fundamental Value Creation is calculated as ratio of value created in the last period to current market cap of the company.

The fundamental value can be created in two ways:
• cash generation in form of dividend payments or debt reduction or share buybacks
growth of the company enterprise value through improving financial results

The growth of enterprise value in the last period is estimated as product of:
• annualized increase of EBITDA in the last reporting period year over year
• relevant EV/EBITDA multiple (average between actual EV/EBITDA for the company and average general level of 10.0x is applied)

Parameter
#
Formula
Value
    
    
            EBITDA (pre LTM Q)
(1)
732
            EBITDA (last Q)
(2)
827
            EBITDA LTM
(3)
3 384
    
    
        EBITDA LTM / last Q
(4)
(3) / (2)
4.092
    Gain of EBITDA (mln $)
(5)
( (2)-(1) ) * (4)
389
    
    
            EV
(6)
208 051
        Mult
(7)
(6) / (3)
61.5x
        Mult common
(8)
const
10.0x
    Mult avg
(9)
avgerage
35.7x
    
    
    Equity+
(10)
(5) * (9)
13 893
    FCF LTM
(11)
2 633
    
    
Value+
(12)
(10) + (11)
16 526
Cap
(13)
211 487
    
    
Fundamental value creation
(14)
(12) / (13)
7.8%

Potential

EBITDA LTM       3 384
 
EBITDA E       3 540
Mult aim       72.2x
 
EV E       255 589
NetDebt corr       -4 309
 
Cap E       259 898
Cap       211 487
Growth potential            22.9%

Website traffic (visits bln/month) salesforce.com

Three months progress: 3.6%