Canaccord Genuity Raised Price Target on salesforce.com (CRM) Following Q1 Results

Canaccord Genuity reiterates a Buy rating on salesforce.com (NYSE: CRM), and raised the price target to $85.00 (from $80.00), following Q1. CRM reported revenue of $1.51B ($11M ahead of estimates) and non-GAAP EPS of $0.16 ($0.02 ahead of estimates). Analyst Richard Davis said that CRM surpassed to $6B revenue run rate mark faster than any other enterprise software company, and guidance suggests that the $7B mark will be surpassed this year.

Davis Commented on CRM, saying, "This was another excellent quarter. Salesforce.com, in our opinion, is a “structural long,” similar in concept at least to our previous recommendations of Ansys, Ultimate Software, AspenTech, SPS Commerce and now Q2 Holdings and ServiceNow. By structural long, we mean that the best strategy is to trade around a core position in the stock. When the shares get expensive, we suggest that investors own a below normal position and when the stock gets cheaper, it makes sense to overweight the position. On a spectrum of cheap versus expensive, we’d put CRM at the middle to slightly cheap side of that range. Thus, we believe CRM is interesting to buy now and we remain quite bullish on the
stock’s long-term prospects."

Davis also added, "CRM increased full-year revenue guidance by $37.5M, at the midpoint, to $6.52-6.55B, which includes a $175-200M FX headwind. The midpoint of non-GAAP EPS guidance for the year was raised by $0.02. Full-year non-GAAP operating margins are expected to increase by 125-150bps y-o-y. Similarly, growth
expectations for operating cash flow in F2016 were increased from 22-23% to 24-25%."

For an analyst ratings summary and ratings history on salesforce.com click here. For more ratings news on salesforce.com click here.

Shares of salesforce.com closed at $70.16 yesterday.

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