salesforce.com (CRM) Stock Rating Reiterated Today at Morgan Stanley - TheStreet

NEW YORK (TheStreet) -- salesforce.com Inc.'s (CRM) - Get Report rating of "overweight" was reiterated today at Morgan Stanley with a price target increase to $80 from $79.

The provider of enterprise cloud computing and social enterprise solutions shows sustainable and diversified growth, analysts said.

"With real revenue growth contribution from four product groups - sales, service, marketing and platform, with a fifth offering ramping in the coming months, salesforce.com has the diversity of growth drivers needed to sustain durable 25%+ top line growth," analysts said.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Shares of Salesforce.com are up 2.69% to $60.70.

Separately, 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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 25.7%. Since the same quarter one year prior, revenues rose by 37.8%. 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 increased to $245.89 million or 34.23% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 10.20%.
  • 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, SALESFORCE.COM INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 179.7% when compared to the same quarter one year ago, falling from $76.60 million to -$61.09 million.
  • You can view the full analysis from the report here: CRM Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.