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Barchart
Barchart
Mark R. Hake, CFA

Salesforce Overreaction - CRM Stock Looks Deeply Undervalued Based on Its Massive FCF

CRM Salesforce Barchart

Salesforce (CRM) stock has dropped almost 20% in the past two days from $271.62 to $218.07.  The market overreacted to a slight miss in Salesforce's quarterly revenue reported on May 29. This is even though Salesforce generated a massive 66.3% free cash flow margin, guiding for 31.8% for the year. As a result, CRM stock looks deeply undervalued here.

I discussed the Salesforce guidance in my May 27 Barchart article, “Salesforce Earnings Out This Week - CRM Stock Looks Undervalued Based on Its Free Cash Flow.” The company has kept its operating cash flow (and by implication the free cash flow) guidance intact.

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