The CRM market is expected to grow to $24 billion this year and by another 50% in three years. Management, which has raised guidance twice in the past two quarters, shouldn't have a hard time delivering the goods. As is often the case with momentum growth stories, guidance will be the key driver of the stock here.
If management can suggest long-term outperformance, the stock should do well. But this is not a make-or-break quarter by any stretch. There's no denying that Salesforce is an excellent growth story right now. But as with most momentum stocks, it's a two-way street. This means, without warning, the stock could go in either direction.
From my vantage point, with shares trading at around $51, I expect the stock to reach $65 in the next 12 to 18 months on the basis of long-term free cash flow growth and the continued market share gains in CRM.
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At the time of publication, the author held no position in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.