This Company is Taking “Digital-First” to a $1 Trillion Valuation

0 | By Alex Kagin

It’s not every day you talk about a company hitting a trillion-dollar valuation, especially since there are currently only six that are publicly traded. But that is changing rapidly and after digging through dozens of large and growing companies I’ve found one that has a good chance of doing it, which means they could potentially grow 300% without having to acquire another company.

So how do they get to a trillion-dollar valuation? In their most recent investor day presentation, they expect annual revenue to reach $50 billion in 2026, more than double what they currently bring in. If you have some multiple expansion a little above median and a doubling of revenue, that puts you squarely at $1 trillion.

While this company has only been public since 2004, it has made an incredible run, up over 6000% since it joined the Nasdaq. Now, you may be thinking, its best years are behind it, but that is far from the truth. The CEO and Founder is an incredible allocator, manager, and integrator, and has shown time and time again that the right acquisition can help fuel growth in a larger organization.

While that 6000% is definitely a lot, the run is not over yet.

They’ve made their largest acquisition yet of a high growth communications platform, and are seeing accelerating revenue growth even with $20B in annual revenue already.

Now, I am going to share with you my top reasons why they have put themselves on the warpath to become a trillion-dollar company…

  1. Inc. (CRM) does an amazing job with its acquisitions and has shown time and time again that it can make accretive deals. Just take a look down memory lane. ExactTarget was acquired in 2013 with revenue of $286 million. In six years, revenue was almost $1.5 billion. In 2018 they acquired MulesSoft and in 3 years they over doubled revenue to $665 million. All of these acquisitions have helped bolster and cross-sell and grow the company into a $250B software powerhouse. While Salesforce stock has traded sideways over the last several months, partially due to the almost $30 billion price tag for the Slack acquisition, this was an amazing acquisition. Not only does it fit right into the software stack of its Customer 360 platform, but with 42% of Fortune 100 businesses already using the product, it becomes a great product to cross sell to new and old customers. Simply put this acquisition helps Salesforce operate in the new way of work.
  2. Salesforce continues to make it easy for companies to adopt the latest technologies and with its AppExchange ecosystem, they have a competitive advantage that’s hard to beat. Its enterprise cloud has over 3,000 applications, over 100,000 customers, and almost 10 million installs. Some examples include integrations like products like DocuSign, that allow users to generate contracts from inside the platform, or 360 SMS where Salesforce will automatically update customer profiles based on SMS, Facebook Messenger, WhatsApp, and Chatbot messages. These integrations drive new customers to the platform and old ones to stay.
  3. Valuation is always key when buying a company and Salesforce is more than reasonable having never skipped a beat with revenue growth since they went public. In fact, revenue has dipped below 20% only once in the last decade and that was the first quarter of 2021 after lapping tough comps the previous year. They are currently trading at 9x enterprise value to next twelve months (EV/NTM) revenue, well below the median for SaaS companies at 15.6x, and with growth accelerating over the last three quarters, this could be a great time to buy.

There’s still time to take advantage of Salesforce’s growth before they hit the $1 trillion mark, but taking advantage of an asset on its way to $1 trillion isn’t always so straightforward.

Bitcoin, for example, is less than a 15% gain away from crossing the $1 trillion market cap threshold itself. But the catch is, Bitcoin isn’t the best way to play this.

Instead, the real wealth-multiplying opportunities come from other places in the cryptocurrency sector, and I have my eyes on three coins in particular that I expect to take off in value by April 2022. You can see exactly what I mean right here.

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