Multiple (Wix, Salesforce, Splunk, Vertiv) WIX / CRM / SPLK / VRT
Four high-quality TMT names (Wix, Salesforce, Splunk, Vertiv) trade at multi-year-low valuations; closing the margin gap to peers as the market shifts from growth to profitability unlocks substantial FCF/share upside.
Thesis
After a brutal de-rating that has compressed high-growth software multiples from 26x to 7x EV/forward revenue, Starboard pitches four high-quality TMT names that combine sticky businesses, attractive growth, and operating margins well below peer levels. Wix (2.4x revenue vs 4.7x peer median, with -1% FCF margin vs 24%) can reach $6-7 of pro-forma FCF/share by 2025. Salesforce (37% growth+margin vs 49% peer average; first-ever buyback and margin target) can hit $14.50 FY26 FCF/share if it beats its 25% margin guide. Splunk (28% growth+margin, 11% FCF margin) can deliver $8-9/share under new CEO Gary Steele. Vertiv (9% margins vs 17% peer median) can double margins under new CEO Giordano Albertazzi, channeling Dave Cote's Honeywell playbook.
SCQA
Four leading TMT franchises — Wix in DIY web, Salesforce in CRM, Splunk in observability, Vertiv in data-center infrastructure — all hold strong market positions with sticky, recurring revenue.
Each has run growth-first for years, leaving margins, FCF and Rule-of-40/50 scores well below peers; the 2022 valuation reset has compressed multiples to multi-year lows and exposed the gap.
Management at each company should pivot decisively to margin expansion — pricing discipline, cost control, lean manufacturing, capital return — to bring growth-plus-margin in line with peer medians.
Achieving peer-level margins drives 2-3x growth in FCF per share by 2025-2026, implying Wix at 10-12x PF FCF, Salesforce at ~10x PF FCF ($14.50/share), Splunk at ~8-9x ($8-9/share), and Vertiv re-rating from 9x to a 12-13x peer multiple.
The three reasons
- 1
Software multiples have compressed; high-quality TMT names now trade near multi-year lows
- 2
Each target trades at a steep peer-gap discount on EV/revenue and EV/EBITDA
- 3
Closing the margin gap to peers unlocks 2-3x FCF per share by 2025-2026
Primary demands
- Drive operating margin expansion to peer-median levels at each of Wix, Salesforce, Splunk and Vertiv
- Reorient management focus from growth-at-all-costs to balanced growth + profitability (Rule of 40/50)
- At Salesforce: exceed the FY26 25%+ non-GAAP margin target and deploy the $10B buyback plus $20-25B incremental cash on value-accretive M&A or further capital return
- At Splunk: support new CEO Gary Steele to rebuild credibility and execute margin plan
- At Vertiv: install pricing discipline, lean manufacturing and Cote-style operational rigor under new CEO Giordano Albertazzi
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Starboard's 2021 Capitalize for Kids ideas (Corteva +41.6%, Willis Towers Watson -13.3%, both outperforming S&P)
- Dave Cote's transformation of Honeywell (~516% outperformance, 870bps margin expansion)
- Giordano Albertazzi's EMEA turnaround at Vertiv (9% revenue CAGR, 3x margin expansion)
Notable slides (5)
Notes
Multi-target conference pitch given at Capitalize for Kids charity conference (Toronto), not a single-company activist campaign. Opens with 'Update on Last Year's Ideas' (Corteva, Willis Towers Watson) for credibility. Common formula across all four targets: company overview → stock underperformance → peer-gap multiple chart → growth+margin (Rule of 40/50) gap → FCF margin gap → pro-forma upside. No explicit stake disclosure. Tone is collegial/diagnostic rather than adversarial — Vertiv section even quotes management positively ('In short, we screwed up') as evidence the company is at an inflection. Page 47 contains a clean margin-expansion waterfall worth studying. Salesforce idea later became one of Starboard's highest-profile campaigns of 2022-23.