Stock: CRM Date: 3/13/2024 Notes:

Current Year: 2024

Part 1: Is it a good business? Pass %: 50% Does not apply to Banks, Property Developers an
Provide Proof of each of the following: Pass: Yes
Consistent/Increasing SaleTotal % Change
2019 $17,110.0 millions Sales Revenue
2020 $21,260.0 millions 24% $40,000.0 millions
2021 $26,490.0 millions 25% $30,000.0 millions
2022 $31,360.0 millions 18% $20,000.0 millions
2023 $34,860.0 millions 11%
$10,000.0 millions
Avg $26,216.0 millions
$0.0 millions

2019

2020

2021

2022

2023
Consistent/Increasing Operating Income: Pass: No
2019 $503.0 millions
2020 $455.0 millions -10% Operating Income
2021 $548.0 millions 20% $7,000.0 millions
$6,000.0 millions
2022 $1,860.0 millions 239% $5,000.0 millions
2023 $6,000.0 millions 223% $4,000.0 millions
$3,000.0 millions
Avg $1,873.2 millions $2,000.0 millions
$1,000.0 millions
$0.0 millions
Salesforce offers an app marketplace with various third-party integrations. Th

2019

2020

2021

2022

2023
2). Positive Growth Rate
a). Look for EPS next 5Y (Find avg over 3 websites)
Finviz: 14%
Zacks: 17%
GuruFocus: 18%
Yahoo Finance: 15%
Simply Wall Street 19%
3). Sustainable Competitive Advantage (Economic Moat)
Needs to have one or more of the following to consider it having a moat. Two or more has a wide moat.
Present with Company Yes/No Reasoning:
Brand Monopoly: no Salesforce is a recognized leader in the CRM (Customer Relationsh
High Switching Cost: yes Companies integrate their CRM with various other systems and pr
Network Effect: yes Salesforce offers an app marketplace with various third-party integ
High Barrier to Entry: yes Building a robust CRM platform requires significant investment in
Economies of Scale: yes Salesforce has a massive customer base, allowing them to spread

4). Profitable and Operationally Efficient Pass No

Goal 2023 2022 2021 2020
ROE: >12-15%+ 7% 36% 3% 11%
ROIC: >12-15%+ 6% 0% 2% 9%
Sales Revenue growing faster than Accounts Receivables. Pass

5). Conservative Debt Pass Yes Bank/REIT no

Goal Actual Pass?
Current Ratio > 1 1.02 Yes Net Interest Expense:
Debt to EBITDA Ratio < 3 2.05 Yes Cash Flow from Operations:
Debt servicing ratio < 30% 1.2% Yes

A-C do not apply to Banks/REITS. For Banks we look at Common Equity Tier 1 Ratio > 10%. For REITs, check the gearing ra

6). Intrinsic value. Pass

Current Price 294.35
Current IV 295.53
Discount -0.40% `

7). Points of Entry/Current Trend

Get a screen shot after finding support levels and finding points of entry
 y to Banks, Property Developers and Commodity Companies Banks look at sales revenue and net income
Pass: No
Consistent/Increasing Net Income: Net Income
2019 $126.0 millions
2020 $4,070.0 millions 3130% $5,000.0 millions
2021 $1,440.0 millions -65% $4,000.0 millions

2022 $3,000.0 millions

$208.0 millions -86%
2023 $2,000.0 millions
$4,140.0 millions 1890%
$1,000.0 millions
Avg $1,996.8 millions
$0.0 millions

2019

2020

2021

2022

2023
2022

2023

Consistent/Increasing Gross Profit Margin % Pass: Yes Consistent/Increasing

2019 68%
me 2020 67% -2% Gross Margin %
2021 66% -2% 69%
2022 65% -1% 68%
2023 67% 4% 67%
66%
Avg 67%
65%
64%
various third-party integrations. This creates a network effect where more users attract more app developers, which in turn attracts more
2022

2023

63%
2019 2020 2021 2022 2023

Average: 16% Pass? Yes

yes no Total: 4 Pass? Wide Moat

has a wide moat.

r in the CRM (Customer Relationship Management) space, but it doesn't have an absolute monopoly. Companies like Microsoft Dynamics
with various other systems and processes. Switching to a new platform involves significant data migration, user training, and potential dis
place with various third-party integrations. This creates a network effect where more users attract more app developers, which in turn att
requires significant investment in technology, infrastructure, and expertise. This complexity discourages smaller players from easily enter
mer base, allowing them to spread development costs and infrastructure expenses. This gives them an edge in offering competitive pricing

2019 Avg All > 12%?

1% 11% No
0% 4% No Does not Apply To Banks
 yes Cash conversion cycle consistent or declining (for companies with

Goal
Bank Common Equity Tier 1 Ratio > 10%
$29 millions REIT Gearing Ratio <= 45%
$10,234 millions

0%. For REITs, check the gearing ratio 45% or lower.

ales revenue and net income but ignore cash flow.
Pass: YES Cash Flow from Ops
Consistent/Increasing Cash Flow from Operations:
2019 4330 $10,000.0 millions 2019
2020 $8,000.0 millions 2020
4800 11%
2021 $6,000.0 millions 2021
6000 29%
$4,000.0 millions
2022 7110 20% 2022
$2,000.0 millions
2023 10230 51% 2023
$0.0 millions
Avg $5,774.0 millions Avg

2019

2020

2021

2022

2023
Consistent/Increasing Net Margin % Pass: No
0.2019 74%
2020 19% -74% Net Margin %
2021 5% -72% 80%
70%
2022 66% 1111% 60%
2023 12% -82% 50%
Avg 35% 40%
30%
20%
which in turn attracts more users. However, the network
10%effect isn't as strong as some platforms where user-generated content or interac
0%
0.2019 2020 2021 2022 2023

ies like Microsoft Dynamics and Oracle NetSuite are strong competitors.
er training, and potential disruption to workflows. This makes companies hesitant to leave the Salesforce ecosystem once they're deeply e
evelopers, which in turn attracts more users. However, the network effect isn't as strong as some platforms where user-generated conten
ler players from easily entering the market.
offering competitive pricing and continually innovating their platform.
eclining (for companies with physical inventory only) yes

Actual Pass?
No
Yes
 Free Cash Flow:
$3,690.0 millions
$4,090.0 millions
$5,280.0 millions
$6,310.0 millions
$9,500.0 millions
$5,774.0 millions

er-generated content or interactions are core functionalities.

ecosystem once they're deeply entrenched.

s where user-generated content or interactions are core functionalities.
 Intrinsic Value Calculator (Disc
(Be consistent with the den

KEY IN THE VALUES IN THE WHITE BOXES

Name of Stock SalesForce

Stock Symbol CRM

Valuation Method Discounted Cash Flow

Operating Cash Flow (Current) USD$ 10,234.00 millions

Total Debt (Short Term + LT Debt) USD$ 9,426.00 millions

Cash and Short Term Investments USD$ 14,194.00 millions

Cash Flow Growth Rate (Yr 1 - 5) 16.00%

Cash Flow Growth Rate (Yr 6 - 10) 8.00%

Cash Flow Growth Rate (Yr 11 - 20) 4.00%

No. of Shares Outstanding 971.0 millions

Discount Rate 7.0%

NB: Take the last Fiscal Year as the Current

Current Year 2024 Year

Year 2025 2026

Operating Cash Flow (Projected) $11,871.44 $13,770.87
Discount Factor 0.93 0.87
Discounted Value $11,094.80 $12,028.01

Year 2035 2036

Operating Cash Flow (Projected) $32,846.38 $34,160.23
Discount Factor 0.48 0.44
Discounted Value $15,605.08 $15,167.55

Intrinsic Valu
(Discounted Cash Fl
$350,000
$300,000
Value $250,000
$200,000
$150,000
$100,000
$50,000
$0
1 2 3 4
Cash Flow (Projected)
Cash Flow (Discounted)

Discount Rate for US Stocks

BETA DISCOUNT RATE

Less than 0.80 5.2%
1 5.9%
1.1 6.3%
1.2 6.6%
1.3 7.0%
1.4 7.4%
1.5 7.7%
More than 1.6 8.1%

Discount Rate = Risk Free Rate + Beta x Market Risk Premium

Risk Free Rate = 2.19%
Average market risk premium = 3.70%
Updated on 20 Jun 23

Source:
http://www.market-risk-premia.com/us.html

Currency Data

CURRENCY SYMBOL
Australian Dollar AUD$
Canadian Dollar CAD$
Swiss Franc CHF$
Euro Dollar EUR$
British Pound Sterling GBP$
Hong Kong Dollar HKD$
Hungarian Forint HUF$
Indonesian Rupiah IDR$
Israeli Shekel ILS$
Indian Rupee INR$
Japanese Yen JPY$
South Korean Won KRW$
Norwegian Krone NOK$
New Taiwan Dollar NTD$
Polish Zloty PLN$
Malaysian Ringgit RM$
Chinese Ren Min Bi RMB$
Russian Ruble RUB$
Swedish Krona SEK$
Singapore Dollar SGD$
US Dollar USD$
 Calculator (Discounted Cash Flow Method 20 years)
(Be consistent with the denominations used. Usually Millions $)

esForce Financial Statement Currency USD$

CRM Stock Listing Currency USD$

ed Cash Flow Exchange Rate 1 USD$ is equivalent to 1.0000

2.29

10,234.00 millions PV of 20 yr Operating Cash Flow USD$

9,426.00 millions Intrinsic Value before cash/debt USD$

14,194.00 millions less Debt per Share USD$

6.00% Plus (+) Cash Per Share USD$

.00%

.00% Intrinsic Value Per Share USD$

(based on Financial Statement Currency)

0 millions Final Intrinsic Value Per Share USD$

(based on Stock Listing Currency)

(Discount)/Premium -0.40%

ke the last Fiscal Year as the Current

Last Close USD$

2027 2028 2029 2030 2031 2032

$15,974.21 $18,530.08 $21,494.90 $23,214.49 $25,071.65 $27,077.38
0.82 0.76 0.71 0.67 0.62 0.58
$13,039.71 $14,136.51 $15,325.56 $15,468.79 $15,613.36 $15,759.28

2037 2038 2039 2040 2041 2042

$35,526.64 $36,947.71 $38,425.62 $39,962.64 $41,561.15 $43,223.59
0.41 0.39 0.36 0.34 0.32 0.30
 $14,742.29 $14,328.96 $13,927.21 $13,536.73 $13,157.19 $12,788.30

Intrinsic Value Calculator

(Discounted Cash Flow Method 20 years)

3 4 5 6 7 8 9
Year

Discount Rate for China/HK Stocks

BETA DISCOUNT RATE

Less than 0.80 7.9%
1 9.4%
1.1 10.1%
1.2 10.8%
1.3 11.6%
1.4 12.3%
1.5 13.1%
More than 1.6 13.8%

Discount Rate = Risk Free Rate + Beta x Market Risk Premium

Risk Free Rate = 1.95%
Average market risk premium = 7.41%
Updated on 20 Jun 23

Source:
http://www.market-risk-premia.com/hk.html
© 2024 Piranha Ltd. A
USD$

USD$

USD$

282,192.1 millions

290.62

9.71

14.62

295.53

295.53

-0.40%

294.35

2033 2034
$29,243.57 $31,583.05
0.54 0.51
$15,906.56 $16,055.22

2043 2044
$44,952.54 $46,750.64
0.28 0.26
 $12,429.75 $12,081.25

9 10
© 2024 Piranha Ltd. All rights reserved.