salesforce.com, inc. (NYSE:CRM) announced their second-quarter results last night, and they exceeded expectations, with revenue rising by 38% from a year ago to $1.32 billion. The company was discussed on CNBC’s Fast Money today, where analysts were mixed over the company’s valuation.
“[…] Benioff [salesforce.com, inc. (NYSE:CRM)’s CEO Marc Benioff], who’s always kind of sandbagging on guidance, was pretty effusive. I mean that was the most bullish I’ve heard him lately. And the stock hadn’t been performing all that great, but then a 38% jump in revenue I thought was huge, so the fact that he raised full-year guidance even though he kind of sandbagged the next quarter, to me that tells me this stock has a lot more ramp to the upside. It got to $61.00 from $56.00 yesterday; I think it’s got more room to the upside,” said FMHR trader Jon Najarian.
On the other hand, the majority of the other analysts weren’t nearly as sold on salesforce.com, inc. (NYSE:CRM)’s potential for future profit growth. A refrain of multiple analysts was the fact that salesforce.com, inc. (NYSE:CRM) has an almost unanimous ‘Buy’ rating on the street, with 23 ‘Buys’, 2 ‘Holds’, and not a single sell rating, which could limit incremental buyers.
While salesforce.com, inc. (NYSE:CRM)’s stock is up 8% today to just over $60, it was up only marginally the rest of the year prior to today, despite consistently strong results. One reason for that is that robust growth for years to come is already built into the stock’s valuation, which is why some analysts feel the stock has already reached its peak for the foreseeable future and that the strong upward push today may be a knee-jerk reaction to the earnings report that will eventually be given back.
“The time to buy this stock was in May or June. This is a really volatile stock, you really want to buy it on those rare occasions that they disappoint investors. You probably don’t want to jump in on a day like today, where it’s the World’s Fair, but you can trade this stock in both directions,” said Josh Brown.