Wednesday, March 2, 2011

Salesforce.com (CRM) Threatened by Financial Breakdown, Correction

Canaccord Genuity analyst Richard Davis is still high on Salesforce.com (NYSE:CRM), as he raised his rating on the company while boosting his price target.

He noted that the company is “the same industry-leading juggernaut” it was before it took a 10 percent hit last week.

Even so, he said the stock does face a couple of risks. One is the possibility of a breakdown of the financial results, and secondly, a market correction

Davis said in a note, “We spend more time thinking about how those issues affect our company-specific projections than we do trying to play market maven on top of digging like mad for fundamental data points.”

He believes that once investors come back into growth stocks, Salesforce.com will be one of the top companies receiving new investment inflows.

Concerning financials, Davis noted the the fourth quarter report of Salesforce.com was "impressive." He did admit there were concerns over cash flow slowing down in 2011, citing adding more employees and increasing commissions for its people.

Salesforce.com was trading at $128.77, up $0.72, or 0.56 percent, as of 1:26 PM EST.

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