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  • janusonian janusonian Aug 27, 2010 3:09 AM Flag

    Price Targets by various wall street & research firms

    Let's see what we're missing here as the following facts list CRM's price targets vy various Wall Steet & research firms:

    S&P Research: $110
    Wedbush Morgan: $112
    UBS: $115
    Goldman Sachs: $115
    Stifel Nicolaus: $115
    ThinkEquity: $115
    Caris & Company: $120
    Kaufman Brothers: $120
    Deutsche Bank: $130

    As u know, the vast majority of people in this board have absolutely trashed this company, saying that the price will drop significantly from here.

    Certainly these analysts are not always right. But they are better trained than we are. They are CFAs, they track the industry, they follow the company closely and they conduct channel checks as well as in-depth analysis of the company's balance sheet, P&L, product competitiveness, etc. We on the other hand are simply traders who believe CRM's price is too rich and that cloud computing is another bubble in the making.

    How are our credentials in assessing a stock's fair value any better than these analysts? We even say that the longs are morons, dummies, idiots, or pigs. Do we really need to resort to name calling to hopefully take the price down? It's ok to take the short side as there are always 2 sides to a trade. But let's not indignify others or the company just because we want to make money.

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    • Balancing risks is important and I'm sure that isn't a particularly insightful comment.

      If they can grow organic revenues at 25% a year well into the future the stock price would be reasonable.

    • Actually I think now 3par's valuation is crazy, but not so for CRM. I would say CRM is a high valuation stock that's justified by its 30% cash flow per share growth.

      Actually if you look at the stocks that have risen in price the last few months, they are all expensive. By the same token, tech stocks with low valuation have hardly advanced during the same time period.

      I would say that we are more interested in making money than passing judgement as to which stocks are properly valued and which are not. Because just because we think a stock should be properly valued at say $60 for CRM, it doesn't mean that it'll trade down to our price target anytime in the foreseeable future.

    • CRM is already trading at that "crazy" valuation if you choose to use price to sales as a key metric.

    • Thanks for posting the link to the interview.

      One of the points he made was that it was like a utility in terms of revenue stream. Not exactly true as CRM has a fairly high turnover rate. This could come back to haunt them.

      His statement regarding cash flow is also fairly misleading but is par for the course in terms of how analysts value companies. You can spend $100 million on a company and it generates incremental profits. Analysts will include the profits in free cash flow but will ignore the intangible asset write-offs and the cost of the asset itself. Not sure of why it always works but it always does.

      Probably right regarding the shorting potential unless something happens to the broader economy.

    • That's very impressive. I think ur one of the most successful traders I know based on ur info. I also trade stocks for a living but F/T only for 5 yrs. My trading account is only $1 million and I only make about $10k per month on average. It would be great if we can exchange ideas in conducting our trades. My preferred trading software is TD Ameritrade's Thinkorswim.

      Today I traded primarily NZ on the short side and was able to make about 5k by shorting 10,000 sh with an average price of $20.50. I covered just before market closed at $20.00.

    • I know there may actually be some pretty good analysts on Wall St., but as a whole, I don't have too much respect for these guys. For instance, when looking at CRM's revenue, it's pretty apparent that except for the quarters surrounding the economic collapse, Q/Q revenue has averaged growth of around $20 million. So it seems that taking CRM's management at face value and forecasting Q/Q revenue growth for the July quarter of $10 million, and then being surprised when it is $20 million is really not that impressive.

    • I'd agree with you on the uselessness of insults.

      Just to clarify S&P's position, their fair value calculation is $56.40 and it falls into their most overvalued category. They do classify it as a hold and have a $110 price target but that is because of technical indicators. Long-term they think it will go down but over the short term who knows.

    • Take a look at these price targets set by the big guys. The retail shorts who are posting on this board do not have enough money to continue to add to their shorts and do not dare to add to their shorts b/c they may lose even more.

      Those who think that they are way smarter than the Wall Street firms will have to admit some day that they simply can't play this game against the big guys.

    • 12 month out price targets from day of origination, not one week and growth is dead plus long time till next earnings season---HELLO!!!!

    • Given that currently CRM is trading much closer to the price targets of the wall street firms then the $20-$60 price targets by many of you in this board, we have to admit that at least for the time being, we are wrong about our much lower price targets.

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