GAAP earnings basically consider stock based comp as an operational expense and Salesforce does a lot of stock based comp which makes their GAAP earning numbers

GAAP earnings basically consider stock based comp as an operational expense and Salesforce does a lot of stock based comp which makes their GAAP earning numbers very low. Because of this historically Salesforce has traded more reliably as a multiple of its cashflows and currently it trades at around 26x cashflows which is about right if you comp with similar companies. The argument here being that so long as they can grow their cashflows faster than they're diluting them via stock based comp then GAAP earnings aren't all that important since investor's per share cashflows are increasing. Some disagree with this though. My opinion on this is that all earnings should be taken with a grain of salt since both GAAP and non-GAAP earnings are arguably sanitised accounting numbers and not necessarily a reflection of actual financial results.