DA Davidson Cautious On Salesforce.com, inc.; Macro And Company Risks Not Fully Appreciated By Investors

by Jayson Derrick

October 2, 2014 9:00 AM | 1 min read | Make a Comment

In a note to clients on Thursday,

Jack Andrews of DA Davidson described Salesforce.com, inc. CRM as being the “next generation enterprise application cloud computing leader.” Andrews said that the company is on track to generate more than $5 billion in revenue during the current fiscal year and on track to reach $10 billion in annual revenues down the road. However, Andrews hesitates to initiate coverage of Salesforce.com with a bullish rating and rated shares Neutral with a $62 price target. “Salesforce.com's stock price is highly correlated to the overall macro investor sentiment for high-growth technology stocks,” Andrews wrote. “Thus in our view, shareholders of Salesforce.com are making a bet on the overall macro environment, whether they realize it or not.” Andrews notes that Salesforce.com continues to operate in a highly competitive market and competes against large powerhouses like Oracle, SAP and Microsoft that “posses substantial resources and much larger existing customer bases.” Andrews cautions investors if Salesforce.com is unable to maintain product innovation and market shares, operating results could be negatively impacted.

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Posted In: Analyst Color News Price Target Initiation Analyst Ratings Jack Andrews Microsoft Oracle Salesforce.com SAP

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