Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, internet-based software provider (NYSE:CRM) has received the dreaded one-star ranking. Our data has shown that one-star stocks woefully lag the market average; conversely, five-star stocks outperform the S&P by a significant margin.

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.

Salesforce facts

Headquarters (founded)

San Francisco, Calif. (1999)

Market Cap

$3.52 billion


Application software

TTM Revenue

$1 billion


Co-Founder/CEO Marc Benioff
CFO Graham Smith

TTM Price-to-Earnings (CRM and Industry)

97.6 and 18.5


Microsoft (NASDAQ:MSFT)

CAPS members bearish on CRM also bearish on

Research In Motion (NASDAQ:RIMM)
General Motors (GM)

CAPS members bullish on CRM also bullish on

Cisco Systems (NASDAQ:CSCO)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 403 of the 856 members who have rated Salesforce -- some 47% -- believe the stock will underperform the S&P 500 going forward. These Fools include yzfinance and gweech.

Four days ago, yzfinance wrote that the bear case all boiled down to price: " undoubtedly makes good products and understands SaaS [software as a service] better than their bigger competitors (SAP and Oracle), but I just don't get the valuation."

In a pitch from two weeks ago, gweech agrees, citing the stock's lofty earnings multiple (which is even higher today) as reason to run:

Even in a downturn, [Salesforce] has a P/E of 87! People are still way too bullish on this stock. I would expect a reckoning next earnings report. [Salesforce] is still a great company with a great story. They will continue to gain market share. There will be a significant uptick with [Salesforce] when utility computing merges with SaaS and mobile. This won't start materializing until late 2009. In the meantime, I don't expect [Salesforce] to beat the S&P.

What do you think about Salesforce, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Microsoft is a Motley Fool Inside Value pick. Apple is a selection of Stock Advisor. The Fool's disclosure policy always gets a perfect score.