salesforce.com, inc. (CRM)

Zacks Rank 3-Hold, Recommend Neutral, Industry Rank 93 / 217, Target 53.00, Avg target of 31 analysts 63.08

following mrindependent: Salesforce is a solvent rapidly growing company with an enviable product niche. that being said, I think its 150% price runup this year is unjustified and the company will have trouble living up to stratospheric expectations. Currently trading for 100 times its estimated earnings for the 01/10 fiscal year, 10 times book value and 7 times sales.

This stock is way over-valued. If you own it now, good for you, but get out, or be prepared to lose money. No way this will hold up at the first sign of trouble, it will tank, and that will happen in the next year or so.

This met a high level screen to indicate a sell and strong underperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balance sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
I'm testing capabilities of this 1st version of my automated, valuation spreadsheet matched with my personal criteria and see how it holds up.

That multiplehas to come down with slowing growth.

Can someone please explain to me why this stock has held a triple digit pe for 4 years. I lost money shorting it in 2006, then stuck to shorting on caps. Wrong every time. Maybe 5th times a charm.

Salesforce is a solvent rapidly growing company with an enviable product niche. that being said, I think its 150% price runup this year is unjustified and the company will have trouble living up to stratospheric expectations. Currently trading for 100 times its estimated earnings for the 01/10 fiscal year, 10 times book value and 7 times sales.

Downthumb. 101% sales growth rate. Huge cash flow. No debt. 88% margins. 10% short base. High valuations. Large declining deferred revenues. Slowing growth.

will like to see where this goes.

Way overvalued! Obviously the Bulls are letting their horses run with this one. Due for a big pullback. I just shorted this stock. If you have profits on the table, take your money and wait for the correction to buy back in.

Current P/E @ 102.5
Forward P/E @ 76.54

Way overvalued.

When you ask people their opinion of SalesForce.com, the responses seem to fall into two camps. The bullish camp typically hails SalesForce as the "leader in" (or even "inventor of") something called "cloud computing," cites historically consistent revenue growth, and points to a "potential market" (however it is defined) of a few billion dollars. Bears counter by pointing to astronomical ratios (as of this writing: P/E = 103, FP/E = 64, P/S = 5.5, P/B = 8.25), noting that insiders are selling a lot more than they are buying, and decrying the current "over-hyped" and "ill-defined" state of the cloud computing movement.

If you ask me, both sides have legitimate points. It's hard to argue that SalesForce hasn't been a highly successful pioneer in a previously unoccupied space (namely, software-as-a-service, which isn't exactly "cloud computing"), and as a result has staked out a sizable market share and established some nice recurring revenue streams. However, I think the "over-hyped" argument also has merit, as I see a parallel between the manner and levels with which the market currently values this stock and the way it valued some of the dot-com flameouts of the late 90s. The sky-high ratios tell me that there's a lot of expectation for torrid growth already priced in, but with big-name competitors (Oracle, SAP) launching their own SaaS offerings, and smaller, more agile and specialized shops quietly taking away market share, I'm not sure how realistic these expectations are. Additionally, it seems that SalesForce.com has some issues with end-user adoption, so we may see churn increase as this dissatisfaction causes organizational decision-makers to look elsewhere.

And then there's the whole "cloud computing" element. As a software executive, let me make one thing clear: at this point in its nascent history, no one has really agreed upon what "cloud computing" is exactly. This gives software marketing departments free reign to define "cloud computing" in whatever way best suits their company's desired message and positioning. Indeed, if you read the "Cloud Platform" page on SalesForce.com's website, it would seem that they've recently unveiled a mechanism by which "anyone" can "easily" build their own "application in the cloud" from a set of available components -- in other words, an API. While this is a welcome addition to their offerings in the name of innovation (following in the footsteps of Google and Amazon), I can tell you first-hand from years of systems design and integration experience that nearly all APIs promise more than they can ultimately deliver, so whether the SalesForce "Cloud Platform" ultimately goes anywhere (or adds anything to their bottom line) remains to be seen.

Bottom line: there's no doubt that SalesForce.com has changed the way we think about software and how it is delivered, but once the dust kicked up by its torrid growth and the surrounding hype settles, the foolish fundamentals would suggest that this stock faces an increasingly higher likelihood for underperformance.

Even with favorable recent performance, CRM is overpriced.

Should be a $15 stock.

Overly-sexed CRM should fall faster than the market over the next couple weeks/months. Give the valuation metrics a gander:

Market Cap (intraday)5: 5.39B
Enterprise Value (23-Jul-09)3: 4.74B
Trailing P/E (ttm, intraday): 104.72
Forward P/E (fye 31-Jan-11): 55.28
PEG Ratio (5 yr expected): 2.37
Price/Sales (ttm): 4.62
Price/Book (mrq): 7.21
Enterprise Value/Revenue (ttm)3: 4.18
Enterprise Value/EBITDA (ttm)3: 42.732

short candy. my modified future earnings book value estimate is 700m for this company tops. @mkt value well above 4billion today, well lets see, that's about 5 times book value atleast.

Good company--horrible price.

PE of 30-40 might be reasonable for this company as I think it has good long-term prospects.

The stock price is down almost 50% in the last year and the P/E is still over 100. Clearly, the sales areren't coming and the valuation is still too high. And then you look at the insiders blowing out their positions. This has a thumbs down written all over it.

dot-com valuation in 2009.