With Salesforce.com (NYSE:CRM) shares now down 9% and counting -- despite the fact that management crushed estimates and raised earnings guidance -- I think it's time investors asked themselves: What exactly is a corporation's purpose?

The answer, of course, is: To earn profits. Problem is, right now it looks Mr. like Market would prefer the company just rake in revenues, and profits be, um, darned.

In a nutshell
Here's a quick rundown of how the first quarter went:

  • Revenues topped $305 million, or 23% growth over last year's Q1.
  • Gross margins increased 45 basis points to 79.7%, with costs cuts at the operating level pushing operating profitability gains up 365 basis points -- 9.9%.
  • Which handed Salesforce an 88% increase over last year's bottom line, $0.15 per share.
  • And free cash flow amounted to $84.5 million, several times "net income" and 42% higher than last year.

Topping it all off, CEO Marc Benioff confided that even though he's cutting revenue guidance for the year (to about $1.26 billion), he still thinks Salesforce will maintain its lead over EMC (NYSE:EMC) and IBM (NYSE:IBM) to become the first "enterprise cloud computing company to exceed $1.2B annual revenue run rate." What's more, he's convinced Salesforce's cost cuts will yield a bumper crop of profits -- $0.59 to $0.60 per share, or 8% higher than Wall Street predicted.

Wall Street fumbles the ball
Responding to the news, a raft of Wall Street wizards fell to rending sackcloth and rolling in ashes, with Citigroup (NYSE:C) lamenting ASPs "clearly under pressure", Jefferies (NYSE:JEF) fearing "billings deceleration", Goldman Sachs (NYSE:GS) critiquing the valuation, and only Bank of America (NYSE:BAC) sounding anything of a bullish note. (And just how accurate are these bankers? Find out here.)

I disagree.

Tallying up the latest numbers, I see Salesforce generating trailing free cash flow of $193.5 million, which means the stock is trading now for just 23 times its annual cash profits. If Salesforce can continue growing its cash production at even half the rate we saw last quarter (Wall Street predicts a 36% pace), the stock's a bargain. When you consider that the company behind the stock ticker has $517 million in cash, $467 million in long-term marketable securities, no long-term debt, and an even cheaper enterprise value, it's downright dirt cheap.

Foolish takeaway
Wall Street's opinion is clear: It wants Salesforce to grow its revenues at a certain rate, and if the company won't promise to do so, the stock's getting sold. Me, I'm more interested in seeing Salesforce earn profits on its revenues. It's doing that in spades, and I think it's a buy.

And Rich isn't the only one. Find out why Salesforce.com is recommended by the hypergrowth team at Motley Fool Rule Breakers when you sign up for your free 30-day trial here.

Fool contributor Rich Smith does not own shares of any company named above. Salesforce.com is a Motley Fool Rule Breakers recommendation. The Motley Fool has a disclosure policy.