Salesforce (NYSE:CRM), the software giant, is down nearly 30% from its peak and for those looking for a bargain amid the tech wreckage, this one has a lot to like.

Growing mildly fast and steady

Founded by tech trailblazer Marc Benioff, Salesforce provides cloud software that help businesses manage their marketing, IT, sales, among other business functions.

Salesforce isn’t your garage startup — or your grandfather’s social media platform (Meta). It’s not too big — giving it enough growth runway — and not too small to be as risky as other smaller software companies.

• Behemoth status: $220B market cap while generating over $26B in sales a year.
• Steady growth (5-years): Sales grew an average 26% annually — its stock rising 22% compounded annually (35% at its peak).

COVID stimulated Salesforce’s growth as demand for digital tools grew — but despite Zoom’s stock price, cloud services may have ample room to grow. BMO Capital Market analysts expect the sales software market to grow double digits the next few years (via BBG).

Growth at all cost on hold

Salesforce is known for its growth by acquisition strategy — capped off by its blockbuster $27.7B Slack deal in 2020. Integrating Slack is now a top priority for Salesforce.

Profitability is another focus. Despite being profitable since 2016, Salesforce’s earnings have fluctuated wildly from its many acquisitions.

Last year, Salesforce announced higher profitability targets — aiming for 20% adjusted operating margins — arriving at a good time as investors shun high-growth unprofitable stocks.

• Changing focus: In the near term, Salesforce is focused on integrating its past purchases including Tableau, Mulesoft and Slack.
• Growth still matters: Don’t count acquisitions out yet — with Benioff saying the company “continues to look at tactical M&A”.

Investors: Check, check, check

Salesforce ticks off many of the tech-bargain criteria checkboxes: Strong earnings, discounted valuation and continued sales growth.

• In its last earnings report, Salesforce raised its upcoming year’s sales forecast to $32.1B — representing 21% growth from last year.
• Salesforce is also trading below its pre-COVID price-to-earnings and price-to-sales multiple.

Salesforce has consistently outperformed the S&P 500. As it moves into a new phase, maintaining its steady growth while achieving higher profitability will help keep its streak alive.