CRMBullpending
Meet KevinTarget Price
$458
“I've got Salesforce with a fair value of 458, which is still a double from here.”
Thesis at the time
BullishKevin argues Salesforce got unjustifiably cheap during the 'SaaS apocalypse,' pointing to a ~13% free cash flow yield and CEO Marc Benioff buying back stock at $191 as proof of undervaluation. He believes fair value is in the mid-$400s (he cites $458), roughly double the price he bought at, while acknowledging pricing power and growth risks.
Key arguments
- Bought shares around $165 on a ~13% free cash flow yield and 0.9 PEG ratio
- CEO raised $26B in debt to buy back $25B of stock at ~$191, signaling undervaluation
- Operating margin beat (34.1% vs 33.6%) and AI/Data 360 revenue growing faster (20%) than core Agent Force apps (7.6%)
- Cash flow yield of ~7% currently, still 3.5% even at a $450 fair value
Counter-arguments acknowledged
- Pricing was not a significant driver of revenue growth, suggesting weaker pricing power
- Professional services revenue declined ~4% due to fewer large multi-year transformation deals
- RPO grew only 14%, a slight miss, and subscription/Q3 guidance beats were narrow
- Integration with Claude ('Claw Force') could eventually let customers bypass core Salesforce infrastructure
Hedges and caveats (from the video)
- Acknowledges the software bottom 'probably isn't in yet' and could be 'pretty aggressive' when it arrives
- Notes that some stocks like QuickBooks are still lagging in recovery
- Mentions red flags alongside green shoots for Salesforce that will be discussed
- Discusses token/AI integration costs impacting software company margins as a headwind
- Valuation estimates presented are author's opinion and subject to market conditions
The call
- Date said
- Aug 29, 2026
- Price at prediction
- $252.05
- Current price (live)
- $233.28$224.72 below target
- Confidence
- medium
- Specificity
- specific
How it resolved
- Status
- pending
Confidence Reasoning
Specific numeric target from his own valuation model, but delivered with modest certainty language rather than strong conviction terms.
Source
The Software Stock Bottom is IN: Is it TOO LATE to Buy?
Said on Aug 29, 2026Open on YouTube ↗