What happened
Over the years, there has been plenty of bullish momentum supporting the share price rise of Salesforce.com (CRM -0.39%). This hasn't been the case lately, and on Friday a price target cut from a prominent investment bank pushed the customer relationship management (CRM) giant's stock down by nearly 2%.
So what
The price target cutter was Deutsche Bank analyst Brad Zelnick, who now feels Salesforce.com stock is worth $300 per share. That's down quite some distance from his previous $360. Nevertheless, Zelnick is maintaining his buy recommendation on the specialty tech stock.
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Even that reduced level would imply plenty of upside for Salesforce.com; it's nearly 40% above the stock's Friday closing price.
In a new research note, Zelnick wrote that the growth prospects for the software industry are still good. But he's maintaining this sunny view "while having a healthy respect for the market and macro backdrop."
Now what
To some degree, that mirrors Salesforce.com's own cautious outlook. In reporting its Q3 results last November, the company proffered Q4 guidance that fell short of expectations.
Specifically, it forecast just over $7.22 billion to slightly more than $7.23 billion in revenue for the period, a notch higher than the flat $7.22 billion collectively anticipated by analysts. The problem was profitability -- Salesforce.com was guiding for $0.72 to $0.73 per share on the bottom line, however that's considerably short of those prognosticators' average $0.81 estimate.
It seems investors -- and, in Zelnick's case, some analysts -- are getting a bit tied up in near-term numbers. Salesforce.com is a powerful and assertive player in the CRM space and that's not going to change, nor are its powerful long-term growth prospects.
