(CRM) Has 'First-Mover' Advantage to Double Market Cap by FY16 - Analyst

December 7, 2012 12:01 PM EST
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FBR Capital is going ga-ga for, inc. (NYSE: CRM) today, after taking a hard look at the continued growth potential behind the name.

FBR sees easily moving to become a $50 billion company over the next four years, more than double its current valuation of $22 billion. The firm notes that has the "first mover" advantage, giving it massive presence in the cloud market.

Select companies have been able to garner that sort advantage in such an attractive segment, FBR notes, with only the cream of the crop being able to grow revs to over $8 billion The firm thinks will be able to grow its annual revs from $3 billion to the $8 billion mark in calendar 2016. The only other two companies to do the same thing in software were Oracle (Nasdaq: ORCL) and Microsoft (Nasdaq: MSFT).

Two key components that has going for it to reach that new echelon are:
  1. its billion-dollar-plus Sales Cloud continuing to outpace its market; and

  2. recently launched and yet-to-be-launched products that can leverage the machine and emerge as new billion-dollar-plus offerings.

FBR also highlights how was able to move into becoming an application vendor as well, something most enterprise software companies struggle to do.

FBR sees revs to grow at 25 - 30 percent CAGR over the next four years. a transition from the "hyper growth" seen leading up to this point.

Risks include future acquisitions and a shift in invoicing. FBR thinks can overcome those challenges, saying "the company is on track to deliver 30 percent or better organic, adjusted billings growth in FY13 and the impact of a multiyear invoice in F4Q12 and the shift to annual invoicing is transitory."

Shares are down 0.8 percent on the session Friday.

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