Salesforce Tops Year High

Positive analysts' notes help the on-demand software company hit its 52-week high.
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Propelled by a spate of positive notes and expectations that it will deliver a strong quarter on Wednesday,

Salesforce.com

(CRM) - Get Report

has pushed past its 52-week high.

In recent trading Monday, shares of the on-demand software maker were gaining $1.94, or 4.6%, to $44.14, eclipsing the previous 52-week high of $43.65. Volume was heavier than normal.

First Albany analyst Mark Murphy reiterated his rating, saying that demand for Salesforce products appears strong. He also noted that the company has begun hiring salespeople "at a blistering pace" to sell its AppExchange service, its new online platform for creating and sharing applications.

Murphy expects the company to deliver revenue results above the current First Call consensus of $128.9 million. (First Albany does not have an investment-banking relationship with Salesforce.)

Salesforce sells software that helps manage customer relationships. Unlike conventional software, the company's product runs on servers owned by Salesforce and is sold at a relatively low price as an on-demand service.

"We have learned that Salesforce.com and

IBM

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have just recently formed an alliance to target the small-medium business market, yet another indicator of Salesforce.com's tremendous momentum," Roth Capital Partners analyst Nathan Schneiderman wrote in a note to investors. (His company does not have investment-banking business with Salesforce.com.)

A third analyst, Pat Walravens of JMP Securities, was also positive about the quarter but said he has gotten some negative feedback about AppExchange. Some customers, he wrote, complain that they have not gotten a return on their investment.

Walravens, whose firm does not have an investment-banking relationship with Salesforce, added that his own informal tests of AppExchange bear out some of the gripes.

Salesforce will announce third-quarter financial results after Wednesday's closing bell. The company said Monday that it will now present earnings results on a GAAP basis, including the cost of stock options and the amortization of certain recurring intangible expenses.

The shift could cause some confusion, since most analysts who contribute to First Call exclude those items from their estimates.