What changed
$CRM — ADD 📊 | 6 MONTHS THESIS
🧭 Conviction: MED
🎯 FQ1 FY2027 (ends Apr) | reported May 27 | Rev $11.1B | EPS $3.88 vs $3.13 🟢 | Margin 21.1%
💡 Consensus expected EPS $3.13, reflecting low expectations possibly due to debt concerns and slowing revenue growth. The actual $3.88 reveals that buybacks and margin expansion are driving stronger bottom-line growth than anticipated. The market hasn't repriced for this sustainable beat.
📉 Reward/risk: 2.4:1
🏢 Business Quality: 7/10
📊 Valuation: cheap — P/E 10.2x vs sector avg ~20x; EV/FCF 24.4x; FCF yield 5.1%. Range of fair value $170-$200 (P/E 11-13x), cheap relative to historical levels...
🔮 Catalyst: next quarterly earnings report
💰 Entry: $158.37, stop $145.0, target $190.0
⚖️ Add CRM as a long with a 6-month horizon; the market underestimates buyback-driven EPS strength, trading at a cheap 10.2x P/E, but size conservatively due to high leverage.