By David Gibbs
Salesforce.com (NYSE:CRM) is a cloud-based provider of customer relationship management services. Its applications can be customized and integrated with other software applications and are sold on a subscription basis. The company’s offerings have quickly become a ubiquitous sight at offices around the world, and shares have had no problem reflecting the situation. Now trading at nearly 250X TTM EPS, CRM is among the highest of the high-flyers in today’s market landscape.
Earnings: 3Q profit excluding one-time items of $21.1 million ($0.32/share) versus 3Q09 profit of $20.7 million ($0.28/share).
Revenue: Up 30% YOY to $429.1 million.
Actual Versus Wall St. Expectations: CRM beat the Street, as analysts had been expecting 3Q EPS of $0.31/share.
- CRM issued 4Q EPS guidance of $0.27-$0.28 on $447-$449 million in revenue. Analysts had most recently forecasted EPS of $0.28/share on $445 million in revenue.
- Growth was strong all over the map, as revenue rose 26% in the Americas, 38% in Europe, and 53% in Asia-Pacific.
Did You Hear That? CEO Marc Benioff noted that CRM has “a lot of confidence and [has] ramped up.” He went on to say that CRMs new Chatter platform, while not yet generating material revenue, “is strategic because customer use of our [main] products goes way up. It opens the doors to a lot of new business for us.”
Technicals: CRM traded between $100-$125 since late-August but broke out of that range with authority on Friday following Thursday night’s report. Shares jumped over 18% in just one day, finishing up at $136.74. Currently trading at all-time highs, CRM has just about as bullish a chart as a stock can have.
Commentary: CRM is hooked into the cloud computing craze that has driven many a stock into the stratosphere this year. In fact, CRM may even be the ring leader. Showing no regard for his company’s competition, CEO Benioff remarked that competitor IBM’s (NYSE:IBM) Lotus Notes is “junk” and that Microsoft’s (NASDAQ:MSFT) SharePoint is a “grandmother’s attic.” Strong words, but the fact of the matter is that he may be right. CRM is up nearly 100% in 2010 alone and is sure to keep moving higher so long as the market remains in its bullish trajectory. Be warned, however, that should the market take a serious hit, stocks like CRM are likely to fall the hardest.
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Disclosure: No position