NEW YORK (TheStreet) -- Salesforce.com (CRM) provides its customers with a suite of products that it claims can help their marketing departments track every detail of their customers' behavior through cloud computing, allowing clients to gain valuable insight into the success of their marketing.
With such an ambitious promise of services it must have to as a great surprise to investors that the company has now told the SEC that it can't even quantify its own revenue streams. In a filing Tuesday the company said that it could not distinguish between revenue from subscriptions from new customers and upgrades from existing ones.
Must Read: Warren Buffett's 10 Favorite Stocks
The company has more than 100,000 clients currently and the stock has been suffering on the heels of this revelation for the past few days.
As of the closing bell on Friday CRM stock is down 3.8% to $60.74 a share.
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 and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 37.2%. 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.
- Compared to its closing price of one year ago, CRM's share price has jumped by 58.66%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- SALESFORCE.COM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SALESFORCE.COM INC continued to lose money by earning -$0.40 versus -$0.48 in the prior year. This year, the market expects an improvement in earnings ($0.50 versus -$0.40).
- 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 459.5% when compared to the same quarter one year ago, falling from -$20.84 million to -$116.62 million.
- You can view the full analysis from the report here: CRM Ratings Report