Salesforce current valuation is compelling, activist Starboard Value says

Activist investor Starboard Value, which first began pushing for changes at Salesforce (NYSE:CRM) about two years ago, said the company’s current valuation is compelling.

“Salesforce’s current valuation is compelling, especially if the company can reach, and exceed, the Rule of 50,” Starboard said in a presentation given at the 13D Monitor Active-Passive Investor Summit in New York City on Thursday.

Starboard believes that Salesforce (CRM) can reach the Rule of 50 and generate more than $20 of free cash flow per share in FY2028.

“We think there’s a lot more to go, but it’s not contentious at all” between Starboard and Salesforce, Starboard founder and CEO said in an interview with CNBC on Tuesday.

Salesforce has driven “meaningful improvements” in sales and marketing and G&A efficiency since FY2023, and the Starboard believes it can continue to drive “incremental efficiencies” in the categories, according to the presentation.

It was first disclosed in October 2022 that Starboard had taken a “significant” stake in Salesforce (CRM) and that the activist wanted the company to work on improving its margins.

Shares of Salesforce (CRM) ticked down by 1% on Tuesday.