Following Salesforce.com Inc.’s (NYSE: CRM) earnings report in late February, we saw many analysts make upgrades and raise their price targets for this stock. However this was not the case for Argus. Argus downgraded Salesforce.com to a Hold rating with a price target of $71, due to excessive valuations.

To put it basically, the firm downgraded Salesforce.com to Hold because it has neared its target price of $71.

For the fourth quarter, the company had $0.14 in earnings per share (EPS) on $1.44 billion in revenue, both in line with consensus estimates.

Looking ahead to the first quarter, Salesforce.com expects to have EPS in the range of $0.13 to $0.14 on revenues of $1.49 billion to $1.51 billion, versus consensus estimates of $0.15 in EPS on $1.50 billion in revenue.

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Argus lowered its 2016 fiscal year EPS estimate to $0.71 from $0.73 and established a 2017 fiscal year forecast of $0.89. Its 2016 fiscal year estimate is above the high end of the company’s guidance range of $0.67 to $0.69 per share. It is worth noting that Salesforce.com has a history of raising its guidance as the fiscal year progresses. The company expects foreign exchange to have a negative impact in the range of $175 million to $200 million on revenue and a negative 25- to 50-basis-point impact on operating margins.

Deferred revenue rose 32% in the 2015 fiscal year to $3.3 billion. Contracted but unbilled revenue rose 27% to $5.7 billion. The growth in deferred and contracted, but unbilled revenue points to the strength of Salesforce.com’s sales pipeline. The company’s focus on business solutions has also led to more strategic relationships with customers and, of course, the opportunity to upsell.

According to Argus:

Salesforce.com will need to quickly launch new products and extensions to maintain its lead in cloud CRM. It is doing just that with the new Analytics Cloud and the Salesforce1 platform. Analytics Cloud is a natural extension from CRM into management analytics, while Salesforce1 provides an application ecosystem and unified platform for all of the company’s offerings, including the Sales, Service, and Marketing clouds. It may be accessed on mobile devices and provides a platform for custom and third-party application development. Salesforce.com sees its addressable market, including CRM and other software-as-a-service opportunities, growing to $40 billion by 2017. In this scenario, the company would come close to doubling in size just by maintaining its current market share.

Shares of Salesforce.com were down 1.6% at $68.27 at midday on Monday. The stock has a consensus analyst price target of $75.74 and a 52-week trading range of $48.18 to $71.00.

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