salesforce.com, inc. ($CRM) Possible Buy to $206 Confident Investor Rating: Good

Company name salesforce.com, inc.
Stock ticker CRM
Live stock price [stckqut]CRM[/stckqut]
P/E compared to competitors Fair
MANAGEMENT EXECUTION
Employee productivity Poor
Sales growth Good
EPS growth Good
P/E growth Good
EBIT growth Good
ANALYSIS
Confident Investor Rating Good
Target stock price (TWCA growth scenario) $179.24
Target stock price (averages with growth) $304.84
Target stock price (averages with no growth) $265.88
Target stock price (manual assumptions) $179.23

The following company description is from Google Finance: http://www.google.com/finance?q=crm

Salesforce.com, Inc. is a provider of enterprise cloud computing applications. The Company provides a customer and collaboration relationship management (CRM), service to businesses of all sizes and industries worldwide and provides a technology platform for customers and developers to build and run business applications. Cloud computing refers to the use of Internet-based computing, storage and connectivity technology for a variety of different services. The Company designed and developed its offering, which can be deployed, customized and integrated with other software applications. The Company delivers its service through the Web browsers. It markets its service to businesses on a subscription basis, primarily through its direct sales efforts and indirectly through partners. In May 2010, the Company acquired Jigsaw Data Corporation, a cloud provider of crowd-sourced data services in the cloud. In January 2011, it acquired Heroku, Inc. and Dimdim, Inc.

Confident Investor comments: My biggest concern with this stock is its huge P/E even compared to its peer group. The only real way to justify this P/E is that no other company has come up with an effective product to compete with Salesforce.com for its core offering. If that were to happen or if the growth in that core market should slow, this stock would be ripe for a correction. My second biggest concern is that the company operates on very thin margins making far less than 2% net profit on its sales and this is reflected by a troubling ratio of income per employee. At this price and at this time therefore, I think that a Confident Investor can cautiously invest in this stock even though most of the other metrics are quite good.

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