Cloud-based business software titan Salesforce (NYSE:CRM) brought in hefty gains on Thursday.
The biggest reason for the latest gains? Improved guidance, and at a great time for it. With a market that's becoming increasingly amenable to cloud-based systems, tools like those Salesforce offers are proving increasingly valuable. That's got me bullish on Salesforce overall, and I'm far from alone.
Salesforce stock has had a wild year. The company's share price has had lows approaching $200, and highs of almost $280 per share. (See Salesforce stock charts on TipRanks)
The latest news served nicely to give Salesforce another upward push. Originally, the company projected revenues between $26.2 billion and $26.3 billion for Fiscal Year 2022. The revised estimates look for the company to now produce revenues between $26.3 billion and $26.4 billion. The uptick isn't exactly large, but given the numbers involved, it's still a sound result.
Wall Street's Take
Wall Street consensus analysis calls Salesforce a Strong Buy, based on 31 Buys, and six Holds. The average CRM price target of $317.34 implies upside potential of 11%.
Growing Cloud-Based Market
If 2020 taught us anything, it's how absolutely vital an online presence is. Online presence is crucial whether it's selling to customers or connecting employees.
2020 proved that telecommuting can work, despite the comments of high-ranked naysayers like Marissa Mayer. In fact, 2020 made it abundantly clear that companies can survive, even thrive, with workforces that never see the office.
Proper telecommuting, though, tends to work better with the right tools. That's the premise Salesforce is currently riding to investor glory. Throw in an increasing interest in tools like automation and artificial intelligence at work and the end result is a market that needs more of what Salesforce is offering.
Better yet, Salesforce has been augmenting its slate of offerings. The recent purchase of Slack certainly didn't hurt matters, as a large portion of the workforce turned to Slack to make meetings happen.
Offering new and improving tools helps keep Salesforce front-of-mind with its clients, and helps ensure that customers keep finding new reasons to come back and buy from Salesforce.
Concluding Views
Salesforce shares are pricey right now. It also has a customer base that has now experienced, first-hand, how crucial Salesforce systems are to staying in business if lockdowns ever come back.
Even without a pandemic to keep remote working moving, companies will be hard-pressed to deny their employees access to remote work.
With a solid proposition behind it, and better outcomes likely to follow, getting in on Salesforce now could get you in on the growing remote work trend to come.
Disclosure: At the time of publication, Steve Anderson did not have a position in any of the securities mentioned in this article.
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