By helping to usher in the cloud computing and software-as-a-service megatrends, salesforce.com (NYSE:CRM) has become one of the most successful tech stocks of all time. Its shares have delivered enormous returns to investors along the way, to the tune of more than 900% over the past decade. 

Investors who bought Salesforce stock at pretty much any point over the past 10 years and held it have done well for themselves. But will those who buy shares today continue to fare as well?

A person holding his hands below a digital cloud

Image source: Getty Images.

The best play on digital transformation

Companies around the world are moving some of their most important operations to the cloud. Salesforce lies at the epicenter of this massive global trend. It's far and away the leader in customer relationship management software, with a larger market share than its three closest competitors combined. 

Yet Salesforce is far more than just a CRM software provider. The tech giant's $15.7 billion acquisition of Tableau Software also made it a leader in data visualization. "Tableau helps people see and understand data, and Salesforce helps people engage and understand customers," Chairman and co-CEO Marc Benioff said when the deal was announced. "It's truly the best of both worlds for our customers -- bringing together two critical platforms that every customer needs to understand their world." 

Salesforce's $6.5 billion acquisition of MuleSoft is another powerful growth driver. MuleSoft's data integration tools are highly valued by businesses seeking to aggregate and analyze information from many different sources. "Every company is undergoing a digital transformation and integration has never been more strategic," said Benioff at the time of the deal. "Now with MuleSoft, Salesforce will enable customers to connect all of the information throughout their enterprise across all public and private clouds and data sources -- radically enhancing innovation." 

As these deals highlight, Salesforce has a proven track record of acquiring best-in-class technology and effectively integrating it into its already impressive suite of services. Each new service helps to reinforce the others and strengthens Salesforce's overall ecosystem. Moreover, each new service gives Salesforce an opportunity to provide more value to customers, thereby making it less likely they'll leave its platform for one of its competitors.

Long runways for growth still ahead

Despite many years of torrid growth, Salesforce continues to enjoy tremendous opportunities for expansion. The digital transformation market will grow to $665 billion by 2023, according to research firm MarketsandMarkets, up from $290 billion in 2018. For a business that generated $13.3 billion in fiscal 2019, this massive global market should provide ample room for growth in the coming years. 

For its part, Salesforce pegs its current addressable market -- which includes opportunities across its sales, service, marketing, commerce, analytics, and integration segments -- at $140 billion. Management believes the software titan can grow its revenue to as much as $28 billion by 2023, $40 billion by 2028, and $60 billion by 2034. 2034 is a long time away, and reaching $60 billion in revenue would require Salesforce to grow its current sales base more than four times over. Yet Salesforce has a history of hitting -- and exceeding -- Benioff's aggressive targets. Investors shouldn't bet against the company surpassing its long-term growth goals.

Worth the price

Salesforce's stock is not cheap by traditional valuation metrics. Shares currently trade for more than 40 times trailing free cash flow and 50 times analysts' earnings estimates for fiscal 2020. That's a bit rich for a business that's projected to grow its profits by almost 19% annually over the next five years. 

That said, Salesforce has almost always appeared to be expensive -- except in the rearview mirror. Investors who have purchased shares pretty much any time in its history as a public company have done well, and there's little reason to believe that will change any time in the near future. Normal volatility could certainly cause the stock to pull back in the near term, but Salesforce's long-term revenue and earnings growth should help to drive its shares steadily higher over time.

All in all, Salesforce's stock is a buy. Shares may be a bit expensive, but Salesforce is an elite business that's well-positioned to profit from the digital transformation megatrend. It can realistically grow its sales and profits at impressive rates for well beyond the next decade -- and investors who buy shares today should be well rewarded in the years ahead.