As Salesforce finalizes the Slack acquisition, should you invest in CRM shares?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jul 21, 2021
  • Salesforce officially completed the acquisition of messaging technology company Slack on Wednesday.
  • The purchase puts CRM in a solid position to disrupt the remote work environment further.
  • Shares edged slightly higher 0.9% after the official announcement. Should you buy CRM stock now? Inc. (NYSE:CRM) completed the $27.7 billion acquisition of Slack Technologies on Wednesday, paving the way for the company to disrupt the remote work market further. However, CRM shares barely reacted to the news moving higher by 0.9%. 

Slack Technologies is the world’s leading corporate messaging platform and will give Salesforce access to one of the most disruptive developments in the workforce management market.

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Analysts said that completing this acquisition thrusts Salesforce into the work-from-anywhere market, enabling organizations to manage their global workforce efficiently and through secure communications channels.

Is Salesforce stock a buy in Q3 2021?

Salesforce’s long-term outlook promises growth after investing in one of the fastest-growing markets with Slack acquisition. This purchase gives the company access to more markets, including expanding its customer base by serving more startups and small businesses.

The remote work environment is a disruptive force in the workforce management market, and Salesforce will be at the forefront to benefit in the coming years.

From a valuation perspective, Salesforce trades at a P/E ratio of about 50.26, making it relatively more attractive to investors looking to capitalize on its long-term growth story. However, value investors may have better options to look at with Germany’s SAP SE (ETR:SAP) trading at a more attractive P/E ratio of 26.01.

Source – TradingView

Technical overview: Salesforce stock price forecast for Q3 2021

Technically, shares appear to have recently bounced off the ascending trendline support in the daily chart. However, the stock price is yet to hit overbought conditions in the 14-day RSI, leaving room for more upward movement.

Therefore, investors can target extended rebounds at approximately $254.22 or higher at $264.38. The key support levels are $232.46 and $222.01. 

Bottom line: the case for buying shares long-term

Although Salesforce shares seem steeply valued compared to close peer SAP SE’s, the company’s investment in Slack technologies is a catalyst for long-term growth. The CRM stock price rebound also appears to have solid momentum to continue before hitting overbought conditions in the short term. 

Therefore, is an excellent stock to add to your portfolio if you target long-term growth, but there is also an opportunity to profit in the short term by targeting rebounds and pullbacks.

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