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2011 Looks Bad for Salesforce.com

Salesforce.com (CRM) is one stock I would love to own. Here’s an outlook on revenue from 2009 to 2012 (est).

2009 $1.1 billion
2010 1.3 billion
2011 1.7 billion
2012 2.1 billion (almost a double in three years)
2013 2.5 billion

Profits have been/should be growing at a much faster rate.

One-Year Chart

The company is growing fast, problem is with the stock. Annual profit growth is expected to slow from 94% last year to 13% this year. That’s bad. Especially when you’re ballancing on a P/E of 92 (as of today).

Here’s the Earnings Table. Profit growth is expected to be 3%, 17% and 3% the next three quarters before jumping to 39% four quarters from now. That could mean the stock has trouble moving (up) until four quarters from now — 2012.

So in a nutchell, I’m keeping CRM on the radar but the stock would have to drop for me to like it.

Fair Value

What is Salesforce.com stock worth? This quarter’s Fair Value calculation shows $55. I would think $73 would be a nice price to buy as revenue is still growing strong — its only profits that look to slow this year.

Even $73 would be a long way down from $130. 2011 doesn’t look like a good year for CRM.

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