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
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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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Salesforce, Microsoft, and Oracle. Motley Fool newsletter services have recommended buying shares of Salesforce and Microsoft, as well as creating a synthetic covered call position in Microsoft. A separate Motley Fool newsletter service has recommended shorting Salesforce. Try any of our Foolish newsletter services free for 30 days.