This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

4 Top Software Stocks To Kick Off 2012

Stocks in this article: CRM CTCT CARB TYPE

Salesforce.com

Share price: $114.13

Canaccord Genuity believes Wall Street analysts did the cloud software company a "disservice" last quarter when it missed calculated billings. "Single quarter calculated billings are variable (changes in currency, changes in invoicing duration, accounting of acquired revenues, etc.) and not necessarily indicative of a firm's outlook," explained Davis, in the research note. "Revenue and cash flow trends are positive, and we think a look at the firm's off-balance-sheet backlog in Q4 could produce an upside surprise."

Salesforce.com is expected to report earnings on Feb. 16, and analysts polled by Thomson Reuters expect earnings of 40 cents per share on revenue of $622.5 million.

The research firm recommends buying shares now, as shares are cheap, trading at 4.7 times enterprise value divided by revenues, and 27 times 2012 free cash flow.

There are, however, potential caveats to buying shares, says Canaccord. Salesforce.com has increased its headcount by 40% and this may not payoff if the new employees are not as productive as previous ones. The analyst firm also notes that the software maker does not have free cash flow support, and could move lower.

Canaccord sees six-month upside potential of $135 per share in salesforce.com, almost 20% upside from current levels.

Salesforce.com sales have lost 13.45% over the past 12 months, but have gained 12.81% year-to-date, according to Google Finance.

2 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs