NEW YORK (TheStreet) -- Shares of salesforce.com., inc. (CRM - Get Report) are up 2.02% to $54.42 after it was reported that Microsoft (MSFT - Get Report) and the company are planning to announce an agreement as soon as today that will enable customers of Microsoft's cloud-computing service to use Salesforce's enterprise software, sources told Bloomberg.
The partnership will make Salesforce's customer-management programs available on Microsoft's Azure service, the sources added.
Salesforce will also commit to using Azure to host some of its own applications and will integrate data from Salesforce products into Microsoft's Office programs, the sources said.
TheStreet Ratings team rates SALESFORCE.COM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SALESFORCE.COM INC (CRM) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 37.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 67.05% to $473.09 million when compared to the same quarter last year. In addition, SALESFORCE.COM INC has also vastly surpassed the industry average cash flow growth rate of 9.58%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.48 is very low and demonstrates very weak liquidity.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 43.1% when compared to the same quarter one year ago, falling from -$67.72 million to -$96.91 million.
- You can view the full analysis from the report here: CRM Ratings Report