Jeffries: Big Slowdown For Salesforce.com Inc. Subscriber Growth

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Salesforce.com Inc.'s
CRM
has seen a major slow-down in subscription growth even as its spending on subscriber acquisition has outpaced competitors, an analyst said Thursday. The San Franciso marketing services company fell Thursday on a disappointing outlook by more than 4 percent. But Jeffries' John DiFucci said its growth is slowing more than most investors realize. DiFucci launched coverage of the company with an Under Perform rating and $48 target. Annualized subscription billings growth of 12 percent in the year to date, has slowed consistently from 68 percent growth four years ago, DiFucci said. Recent revenue growth of 30 percent "is a backward-looking measure" for so-called subscription-as-service companies, DiFucci said. Moreover, the company spends about $1.94 for each dollar of new business, versus an industry average of about $0.75 cents, according to DiFucci. The company seeks to obtain larger customers and expand into related markets, but DuFucci said those will be "difficult goals to attain." revenue between $1.436 billion and $1.441 billion, suggesting a 25% to 26% growth from last year. Salesforce expects per share non-GAAP EPS of 13-14 cents. Analysts were expecting 15 cents a share in Q4 earnings.
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