Oracle’s primary cloud service is Oracle Corporation (NASDAQ:ORCL) Cloud, which allows enterprises to shift data and applications between the public cloud and their private cloud. Much like many of the major tech companies, Oracle is looking to expand its cloud-based offerings to boost top-line growth over the long term.At the end of the first quarter there were a total of 69 hedge funds long the stock, this includes the top hedge fund owner by market value, which took a $967 million position that made up 5.8% of its portfolio (see Eagle Capital’s portfolio).
The big advantage for SAP AG (NYSE:SAP) is its leading position in enterprise resource planning (ERP). SAP leads the enterprise resource planning application market, with 35% market share of 35%, followed by Oracle Corporation (NASDAQ:ORCL) at 20%. Meanwhile, SAP also leads the market In customer relationship management software, with around 20% market share, ahead of Oracle and salesforce.com, inc. (NYSE:CRM).
salesforce.com, inc. (NYSE:CRM) trades at quite the outsized P/E, a forward P/E of 67. Its P/B multiple is also rich, at over 10 times, well above the 5.9 times industry average. However, with Salesforce.com’s dominant position in the CRM market and the impending increase in spending on enterprise software, the premium may well be justified. Salesforce.com has a five-year expected earnings growth rate of 40%, which is much higher than the peer group average of 18.7%.
Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends salesforce.com, inc. (NYSE:CRM). The Motley Fool owns shares of Oracle Corporation (NASDAQ:ORCL).
The article Is This SaaS Company Just Too Expensive? originally appeared on Fool.com.
Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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