Salesforce.Com Set For Earnings (CRM)

After today’s close, we’ll get the awaited earnings relase from Salesforce.com (NYSE:CRM).  First Call pegs estimates at $0.01 EPS and $173.6 million in revenues.  Next quarter estimates are $0.02 EPS and $188.3 million in revenues. 

The forward valuations on this stock are still in the stratosphere, so they will have to keep performing everyone’s favorite tune and they’ll have to keep banging those drums.  The fiscal 2008 end in Jan-2008 shows estimates at $0.08 EPS and $730 million in revenues, and fiscal Jan-2009 estimates are $0.27 EPS and $1 Billion in revenues.  Here is what this does for forward valuations:

Fiscal Jan-2008: forward P/E ratio of 500-ish and forward sales multiple of 6.98.  Fiscal Jan-2009: forward P/E ratio of 164 and forward sales multiple of 5.1.

Thee 52-week trading range is $26.92 to $50.43, so even at the current $44.50 it still has a lot of air if they can’t overly please investors.  Analysts still have an average target over $50.00 and there havent seemed to be any stellar or major impact analyst calls for some time.  For the most part this has traded in a $40.00 to $50.00 trading band in 2007 and more recently it has spent most of the summer trading between $40.00 and $45.00.  Options expire this Friday and it looks like options traders on a static snapshot based on today only are not expecting much more than a $2.00 move in either direction.  Its hard to know what the real short interest now after a huge market swing, but its short interest grew from 8.4 million in June to more than 9.5 million shares in July.  As short sellers have recently been able to win again in general, this may become an even larger post-earnings trading wildcard than before.

Jon C. Ogg
August 15, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.