CRM Investment Analysis Report & Stock Research, Salesforce.com Inc

Salesforce.com Inc (CRM)

CRM Stock Report

2-Year Price History

View Larger CRM Chart
NYSE:CRM
$64.70
(2/9 1:48PM)
+4.2%
Open$62.68 Mkt Cap$7.8 Billion
High$64.86 52Wk High$75.53
Low$62.54 52Wk Low$27.03
Volume1.4 Million Avg Vol 10D1.8 Million

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CRM Revenue

As a value investing shop, we are interested in seeing how CRM's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 8 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 11.30x and the low end of the range at 4.68x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for CRM of 6.25x is well below its normal historic Price to Sales levels. At a price of $62.08, CRM is 22% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

CRM Cash Earnings

Looking at CRM specifically in their Cash Earnings capabilities, Ockham views CRM as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for CRM, the current level of Cash Earnings compared to its historical levels helps identify where CRM is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 80.09 and a historical low Cash Earnings per share ratio of 35.14, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for CRM? From the Ockham perspective, we are looking specifically at CRM to see if the market is recognizing the huge disparity between CRM's past stock price to Cash Earnings ratio to today's levels. At a difference of 28% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at CRM. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

CRM Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely. As of the time of this report, our data provider does not have historical data for CRM. Therefore, we are not utilizing the dividends portion in our study. So, we do not know whether CRM currently pays a dividend at present or not, we have an "expected dividend" payment listed in key fundamentals but cannot varify it.

Peer Comparison

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Salesforce.com Inc Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including CRM) 13.77 6.05 » 36.11 3.61 1.79 » 14.95 10.56% 15.39%
*10 year range does not include current year values
Computer Sciences Corp. CSC $7.9 Billion $51.68 3.81 1.53 » 7.62 0.49 0.22 » 0.82 2.54% 11.74%
Salesforce.com Inc CRM $7.8 Billion $62.12 41.95 18.26 » 204.75 6.25 2.38 » 15.35 62.16% 6.08%
Citrix Systems, Inc. CTXS $7.7 Billion $42.11 25.64 5.78 » 37.21 4.74 1.49 » 12.49 21.88% 12.30%
Fiserv, Inc. FISV $7.0 Billion $45.26 9.33 4.66 » 23.84 1.73 0.88 » 4.49 9.33% 18.76%
Check Point Software Technologies, Ltd. CHKP $6.8 Billion $32.31 17.96 9.44 » 82.76 7.59 4.36 » 52.25 13.32% 16.12%
BMC Software, Inc. BMC $6.6 Billion $35.93 12.14 8.83 » 29.11 3.50 1.97 » 4.70 5.70% 18.02%
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5:21P, Jan. 11,2010 CRM $70.27 Salesforce.com Inc
Fast Money

Fast Money Discussed the Latest Development of Salesforce.com Inc

News has broken via the television and viral blogs regarding CRM, so investors should take an interest in learning what was said.

Salesforce.com Inc receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. A significant sell off of $3.88 is underway right now, so investors in CRM should pay close attention to the news. Ranking all stocks in terms of news coverage offers some interesting data. In the case of CRM, it is getting significantly more attention in recent news coverage than we are used to seeing. While bearish sentiment on a stock is not always a bad thing, it is something you need to be aware of. The Motley Fool survey of crowd sentiment shows that many investors believe this stock will underperform.

“… Look at SALESFORCE. COM. Almost a triple like amd. This case 25 to 75. The other was 3 to 9. Well above trend. Whatever they're going to say. …”

1:01P, Jan. 04,2010 CRM $75.21 Salesforce.com Inc
Power Lunch

Yearly Highs and CRM Recently Discussed on Power Lunch

Stick with it or dump it? Power Lunch discusses what an abnormally high price means for CRM's investors. Take note of Ockham's valaution on the stock as well.

The crowd at The Motley Fool does not like CRM and believes that it will Underperform. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, CRM has been less covered in the news compared to the rest of our universe of stocks. Check the news on this stock because there is a catalyst that has allowed this stock to advance 15.92% today. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on CRM. That being said, the recent price appreciation may be too much, too fast and we will consider downgrading on our next report.

“… i'm sue herera, the technology sector dominating today's list of 52-week highs, google, SALESFORCE. COM and analog devices joining the club. New 52-week highs. > > …”

3:18P, Dec. 30,2009 CRM $73.69 Salesforce.com Inc
Closing Bell

Holding CRM Stock? See What Is Being Discussed on Closing Bell

Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on CRM from Closing Bell.

The crowd at The Motley Fool does not like CRM and believes that it will Underperform. Check the news on this stock because there is a catalyst that has allowed this stock to advance 13.60% today. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on CRM. That being said, the recent price appreciation may be too much, too fast and we will consider downgrading on our next report. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, CRM has been less covered in the news compared to the rest of our universe of stocks.

“… Draw your attention to crm, SALESFORCE. COM. It's getting rcrm'ed, creamed today. 2. 7 million shares is about 60% more, 160% of its average day lead volume for the past 200 so ... …”

1:12P, Dec. 21,2009 CRM $69.22 Salesforce.com Inc
Power Lunch

Yearly Highs and CRM Recently Discussed on Power Lunch

Stick with it or dump it? Power Lunch discusses what an abnormally high price means for CRM's investors. Take note of Ockham's valaution on the stock as well.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, CRM has been less covered in the news compared to the rest of our universe of stocks. The crowd at The Motley Fool does not like CRM and believes that it will Underperform. Check the news on this stock because there is a catalyst that has allowed this stock to advance 6.77% today. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on CRM.

“… stocks hitting new 52-week highs on our list today. Micron, SALESFORCE.COM, hewlett-packard, western digital, analog devices. …”

2:34P, Dec. 18,2009 CRM $67.00 Salesforce.com Inc
Street Signs

Check Out Street Signs and News on CRM

Salesforce.com Inc is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Street Signs.

Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Salesforce.com Inc underperforming. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Salesforce.com Inc has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on CRM because it trades within the price range that we would expect given current market conditions and fundamentals.

“… They did not talk about take shares from SALESFORCE. COM. The buy off the oracle quarter, or ral wondering how strong the economy is both u. S. …”

6:43P, Dec. 02,2009 CRM $64.72 Salesforce.com Inc
Mad Money

Mad Money Has News on CRM

Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on CRM from Mad Money.

Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Salesforce.com Inc underperforming. In comparison to the other stocks that we follow, Salesforce.com Inc has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. The Ockham valuation currently has a Fairly Valued stance on CRM because it trades within the price range that we would expect given current market conditions and fundamentals.

“… Amazon, google, okay, apple and SALESFORCE. COM. They have accelerating revenue I will pay through the nose for they have all been winners. …”

9:43A, Nov. 18,2009 CRM $63.91 Salesforce.com Inc
The Opening Bell on Fox Business

The Opening Bell on Fox Business: CRM is Among Most Active Stocks in the News Today

Something important is going on with CRM today, as it is getting a lot of attention on business television and influential blogs.

Its interesting to note that the crowd at The Motley Fool does not like CRM and believes that it will Underperform. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on CRM. When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Salesforce.com Inc has been talked about more than normal recently.

“… SALESFORCE. COM not too pretty. Actually under pressure down 2. 4% the company posted third quarter profits in line in estimates, but not a blowout that many on the street expect... …”

6:03P, Nov. 13,2009 CRM $66.13 Salesforce.com Inc
Mad Money

Stay Current on CRM's News on Mad Money

Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on CRM from Mad Money.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Salesforce.com Inc has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on CRM because it trades within the price range that we would expect given current market conditions and fundamentals. Take notice of the news on this stock because it is up $3.23 since the close of trading yesterday.

“… Target, tjx, you might know that as home goods or marshalls, that kind of thing and SALESFORCE. COM, it's crm. On wednesday, we have netap, nta ntap. …”

6:39P, Nov. 12,2009 CRM $62.90 Salesforce.com Inc
Mad Money

Check Out Mad Money's News on CRM

As always, the latest news on CRM is available to Ockham clients through RazorWire, and it was mentioned recently on Mad Money.

>> caller: getting back to boo-yah from -- florida. >> ricky, you're so fine. You're so fine. What's the stock? >> caller: crm. SALESFORCE.COM. >> SALESFORCE.COM. SALESFORCE.COM in this environment is the right stock. Our friend has the smartest cloud computer technology. Again this stock is right at its great to the wait for a 5%, 10% yes but if you had to get started I would pull the trigger. You need 50 shares. Buy ten right now. I want to go to chris in

“… puter technology. Again this stock is right at its great to the wait for a 5%, 10% yes but if you had to get started I would pull the trigger. You need 50 shares. Buy ten right now. I want to go to chris in …”

6:23P, Oct. 12,2009 CRM $61.47 Salesforce.com Inc
Mad Money

Salesforce.com Inc (CRM) Discussed on CNBC's Mad Money

Salesforce.com Inc is in the news. Find out how this impacts CRM trading on Ockham Research.

Have the government trying to collaborate with the private we think there's a tremendous opportunity there. There's been a lot of talk that we've been emphasizing on our show about cloud computing. Can you tell us where arcsight is with cloud computing? Because we've made a lot of money for people on SALESFORCE.COM with cloud >> and you know what, we're a happy customer of SALESFORCE.COM as well -- >> oh, you are? We're big believers in cloud computing. >> again, we always have to explain this because this is the notion of the server way and you have a simple computer on your so the idea of cloud computing is it used to be the companies would run all of their own i.T. Well, today they're increasing finding efficiencies to move storage out to the internet or the cloud and have other companies run it for them. Move their applications out to the cloud. And there's a lot of it at a much lower cost. The problem is it creates new security exposures. Because you used to be able to put perimeters and protect your now when you put applications out in the cloud and information out in the cloud and other people and your partners who run that for you may have access to it, you might have new security exposures. So for us cloud computing is it's going to grow. But it's also a tremendous opportunity for us in the security business because we >> I know your competitors. I've seen symantec in there,

“… ecause we've made a lot of money for people on SALESFORCE.COM with cloud >> and you know what, we're a happy customer of SALESFORCE.COM as well -- >> oh, you are? We're big believers in cloud computing. >> again, we always have to explain this because this is the notion of the server way and you have a simple computer on your so the idea of cloud computing is it used to be the companies would run all of their own i.T. Well, today they're increasing finding efficiencies to move storage out to the internet or the cloud and have other companies run it for them. Move their applications out to the cloud. And there's a lot of it at a much lower cost. The problem is it creates new security exposures. Because you used to be able to put perimeters and protect your now when you put applications out in the cloud and information out in the cloud and other people and your partners who run that for you may have access to it, you might have new security exposures. So for us cloud computing is it's going to grow. But it's also a tremendous opportunity for us in the security business because we >> I know your competitors. I've seen symantec in there, …”

View All Salesforce.com Inc Stock News

Key Fundamentals

CRM - Salesforce.com Inc Fundamentals
Price (2/9 1:48PM) $64.70
Volume (2/9 1:48PM) 1.4 Million
Last Close Price $62.12
10 Day Average Volume 1.8 Million
13 Week Price Range $60.30 - $75.53
52 Week Price Range $27.03 - $75.53
LTM Revenue $1.2 Billion
 
Shares Outstanding (01/2009) 124.9 Million
Market Capitalization $7.8 Billion
Shares Held By Institutions 119.6 Million
Institutional Holders 404
% Shares Held By Institutions 96.40%
Earnings Per Share (EPS) $0.35
P/E Ratio 105.30
Book Value Per Share $6.88
 
Gross Margin 88.80%
Annual Dividend 0.00
Dividend Yield 0.00%
Beta 2.02
Fiscal Year Ends January

About Salesforce.com Inc

Salesforce.com Inc is considered to operate in the Technology sector. They specifically operate in the Application Software business segment contained within the Computer Software & Services industry.

The Company provides customer relationship management service to businesses of all sizes and industries worldwide and provides a technology platform for customers and developers to build and run applications.