Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, customer relations management software specialist salesforce.com (NYSE: CRM ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Salesforce's business and see what CAPS investors are saying about the stock right now.
|Headquarters (founded)||San Francisco (1999)|
|Market Cap||$20.2 billion|
|Trailing-12-Month Revenue||$2.6 billion|
|Management||Co-Founder/Chairman/CEO Marc Benioff
CFO Graham Smith
|Return on Equity (average, past 3 years)||2.6%|
|Cash/Debt||$1.1 billion / $558.3 million|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 49% of the 1,832 members who have rated Salesforce believe the stock will underperform the S&P 500 going forward.
I'm not saying the product is bad or that I think the company will fail. But pick your valuation multiple, and this company is living back in 1999, not 2012. Start with the fact that they have a GAAP loss. That means we're dealing with non-GAAP numbers, picked by management. But even with those, we are talking about an [83 forward P/E], 31 times free cash flow, and a PEG of 3.5. Yikes! I don't know when it will fall, but the valuation has to come back down to earth sometime.
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