At current levels, risk/reward for salesforce.com (NYSE:CRM) isn't favorable, according to Needham & Company.
They said, "A recent call with an enterprise customer was encouraging, suggesting a need for next generation social collaboration type tools across the broader enterprise, which could benefit salesforce.com (and its Chatter offering) disproportionately given its SaaS leadership, size of installed base, and vendor rationalization trends. In our view, Chatter represents a key product cycle, driving important platform and product differentiation near-term and accelerating salesforce’s SaaS push beyond core sales and service intermediate-term. We would not be surprised to pick up significant Chatter enthusiasm at the upcoming Dreamforce event (Dec 6-8 in San Francisco). Shares currently trade at 8.8x EV/Rev; so despite strengthening fundamentals and likely some positivism from the upcoming Dreamforce conference, we believe that risk/reward is not favorable at current levels."
Needham maintains their "Hold" rating on salesforce.com, which closed Tuesday at $139.22, plunging $4.59, or 3.19 percent.
No comments:
Post a Comment