salesforce.com (CRM): Notes From Dreamforce - Jefferies
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Jefferies analyst, John DiFucci, reiterated his Hold rating on shares of salesforce.com (NYSE: CRM) after the Dreamforce conference where management maintained the LT growth/margin framework, and believes that $20B rev (likely by 2020) and 30% margins are achievable with its current portfolio. M&A may bolster growth but only through augmenting CRM submarkets or new market expansion. Margins should grow with scale, though has remained subdued. A Twitter acquisition remain uncertain.
CRM's two main criteria for M&A are if the company can fill/ augment a CRM submarket, or has the tech to expand into new markets. COO/President Keith Block explained that each integration involves a tradeoff between the premium placed on innovation vs. integration. While the massive live data feed from Twitter could help train CRM's data intelligence model (Einstein), CRM could accomplish this for much less than the $15-30B floated price tag.
No change to the price target of $80.
Shares of salesforce.com closed at $72.63 yesterday.
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