So get this. Salesforce.com (CRM) has its annual estimates lowered — again — and the stock bolts from $100 to $150. Really?
One Year Chart
Here’s the one-year chart of CRM. Last quarter’s profits rose 39% and I guess that helped push the stock up. There were some positive things said about backlog, but I like to see the proof in the earnings.
Wow, that’s a big move from $100 to $150 – that’s ten out of eleven weeks the stock’s been up. Why? Now CRM has a P/E of 111. One hundred and eleven.
Earnings Table
The Earnings Table is flooded with red.
Yes, CRM beat the street by 3 cents last quarter but those estimates were lowered previously — that’s not a beat in my book.
Annual Profit Estimates continue to decline — yes continue. So the 2012 estimate is $1.61. That equates to profit growth of 18% for the year — for a stock with a P/E of one hundred and eleven.
Looking ahead to the next four quarters we see profit growth of 21%, 27%, 21% and 12% projected. These estimateas are also falling, so this might be optimistic.
I’m shocked this stock jumped 50%. What in the world?
Sharek’s Take
Salesforce.com is a rapidly growing company, but the stock is nowhere near the price I would pay for it. CRM would have to drop more than 50% to get me interested.
