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NetSuite (NYSE:N) shares are coming under pressure Monday after Citigroup’s Brent Thill launched coverage of the stock with a Sell rating and a $28 price target.

Thill notes that the stock trades at a multiple of 14.4x enterprise value to next 12 months sales - the highest valuation in the on-demand group and more than double the 5.8x median valuation and the 6.5x multiple for Salesforce.com (NYSE:CRM). “Although NetSuite established itself as the leading vendor of Web-based business applications suites for [small- and medium-sized businesses], we believe the current valuation is justifiable only if it can deliver aggressive revenue growth and rapidly improving profitability beyond a reasonably upbeat scenario.”

He expects the company to lose 9 cents a share in 2007, with profits of 6 cents a share in 2008 and 23 cents in 2009. The Street sees a loss of 13 cents for last year, and profits of 2 cents this year and 39 cents next year.

NetSuite Monday is down $1.04 at $27.81.

Source: Citi Launches NetSuite with 'Sell'