salesforce.com's (NYSE:CRM) stock has risen nearly 20% over the past 12 months, but it's still underperformed many of its cloud peers and the diversified Global X Cloud Computing ETF, which advanced more than 60% over the same period.

Many investors seemed to shun Salesforce's stable returns in favor of higher-growth companies trading at much higher valuations. Salesforce's recent acquisitions, especially its $27.7 billion takeover of Slack, are also curbing its near-term earnings growth. But despite those challenges, I recently started a new position in Salesforce for four simple reasons.

An illustration of a virtual cloud.

Image source: Getty Images.

1. It's a recession-resistant stock

Salesforce went public back in 2004. A $1,000 investment in its IPO would be worth over $75,000 today. It generated double-digit revenue growth through the Great Recession and the recent COVID-19 pandemic, and will likely continue expanding through future economic contractions.

That's because Salesforce's cloud-based services help companies streamline their businesses, automate repetitive tasks, and reduce their dependence on human employees. Those secular trends often accelerate during recessions as companies cut costs.

During the worst years of the Great Recession, its revenue rose 44% in fiscal 2009 (which ended Jan. 31 of that year), 21% in 2010, and another 27% in 2011. The COVID-19 crisis was arguably even more disruptive, since it abruptly shut down entire sectors, but Salesforce's top line still grew 26% year-over-year in the first nine months of fiscal 2021.

That strength indicates Salesforce remains a safer investment than younger cloud companies that haven't weathered as many severe economic downturns.

2. Robust growth at a reasonable price

Salesforce expects its revenue to rise 23% for the full year and another 21% to about $25.5 billion next year. With a market cap of $200 billion as of this writing, the stock trades at less than eight times next year's sales.

That price-to-sales ratio is a bargain compared to other tech stocks. C3.ai, the enterprise AI services company that's expected to generate 13% sales growth in its current fiscal year, trades at over 70 times revenue. Zendesk, Salesforce's smaller peer in the CRM (customer relationship management) market, is expected to generate 25% sales growth in 2021 but sports a price-to-sales multiple of 13.

Salesforce is also profitable by GAAP measures, while many of those other companies -- including C3.ai and Zendesk -- are not. Along that vein, its price-to-earnings valuation is lower than many other profitable cloud companies. Veeva Systems, for example, trades at over 90 times forward earnings.

Investors might be reluctant to pay a premium for Salesforce, because analysts expect its earnings to dip 25% next year as it integrates Slack and ramps up its investments. However, that bumpy earnings growth also indicates Salesforce is continually expanding its ecosystem, which should broaden its lead in the CRM market and generate fresh growth from its sales, marketing, e-commerce, and analytics clouds over the long term.

3. Long-term growth potential

At its investor day presentation in December, Salesforce declared its annual revenue would more than double to over $50 billion by fiscal 2026.

It expects its total addressable market to grow at a compound annual growth rate (CAGR) of 11% between fiscal 2021 to 2025 into a $175 billion market with booming demand for its cloud-based sales, marketing, commerce, analytics, and CRM tools.

That's a bold claim, but Salesforce has easily beat its own long-term growth targets before.

4. It's not a controversial "big tech" company

The tech war between the U.S. and China, ongoing privacy and security concerns, and antitrust issues are generating fierce headwinds for big tech stocks like Facebook, Alphabet, and Amazon.

But Salesforce remains well-insulated from the controversy since it doesn't generate revenue from targeted ads like Facebook and Google, or own dominant e-commerce and cloud platform businesses like Amazon. Instead, Salesforce CEO Marc Benioff, like Apple, has repeatedly criticized Facebook's business practices in the past. 

The bottom line

Salesforce isn't the right stock for everybody. Growth-oriented investors might not be satisfied with its revenue growth, while value-seeking investors might avoid its higher valuation metrics. But I believe the company offers a solid balance between growth and value, and its resilient business model makes it a safe long-term play on the growing cloud services market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.