GWM Core Equity Folio Position Low Down: Salesforce.com (CRM)

Salesforce.com Valuation Could Grow To $50 Billion

By Pete Barlas, Investor's Business Daily
 Posted 12/07/2012 02:57 PM ET

Confirmed Uptrend

Salesforce.com's (CRM) market valuation could jump to $50 billion in four years, from $22.2 billion now, as the company continues to cash in on its software-as-a-service business model.
SaaS lets companies pay for software on a monthly basis rather than paying costly upfront licensing fees. And the software is on the Internet "cloud," where enterprises can access it as needed.

Market Direction Model
Bullish

That's the conclusion of a report released Friday by Daniel Ives, an analyst for FBR Capital Markets. Ives also reiterated his outperform rating on Salesforce, the leading provider of customer relationship management software.

The company's lead in SaaS CRM software and its position in the cloud will likely help it grow as much as rivals Oracle (ORCL) and Microsoft (MSFT) did in the 1990s, says Ives.
"We believe Salesforce.com will join Microsoft and Oracle in being the only software companies to grow revenue from $3 billion to $8 billion in four years," he wrote. "This would place Salesforce.com in the elite $8 billion software revenue club (Microsoft, Oracle and SAP (SAP) — although it took SAP roughly seven years to make the bridge from $3 billion to $8 billion). We believe doing this will drive significant share price appreciation, similar to that experienced by Microsoft and Oracle."