Salesforce.com a Solid Buy Ahead of Earnings, With or Without M&A

NEW YORK (The Street) –- Salesforce.com (CRM) has interested buyers, if you believe the rumors, and it's no wonder given its strong business growth and outlook. This continuing growth should be evident when the company reports earnings Wednesday, making it a strong buy despite the run-up in shares in recent months.

Microsoft (MSFT) is reportedly interested. Before that, the list of suitors had Oracle (ORCL) as the top takeout target. Oracle quickly shot down those rumors, even suggesting it can capitalize if another rival were to acquire Salesforce.com.

Only time will tell where Salesforce.com ends up. And even if the rumor mill runs out steam and nothing happens, the San Francisco, CA.-based company, which will report first-quarter earnings Wednesday, remains a top pick among investors.

Despite CRM stock having already gained 22% so far in 2015, CRM stock still has a consensus buy rating and an average price target off $80, implying that analysts expect 10% gains from levels of around $82. And the stock's highest price target of $95 implies more than 30% gains in the next twelve months. If you thinks 30% stock gains in a year is too bullish, consider the following.

CRM stock has dominated the iShares North American Tech-Software ETF (IGV) not just year to date (up 22% vs. 9%), but also over the past twelves months, gaining almost 41% compared with 28% gains for the IVG. And if you've bought and held CRM stock over the three years, your position is up almost 110%, versus
65% gains for the IGV. Take a look at the chart.

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