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.