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salesforce.com, inc. Message Board

  • neodinium1978 neodinium1978 Jan 3, 2013 10:30 AM Flag

    CRM Rich on a Price to Operating Cash Flow too

    In addition to the revenue I checked to see where CRM has traded in the past three years relative to its operating cash flow. The story is basically the same. At the end of 2010 it traded at 48 times operating cash flow. This was the highest ratio it ever traded in the past three years. At the beginning of 2012 it traded at 23.7 times operating cash flow. The average operating cash flow ratio is 35.85. It's currently trading at 41.1 times operating cash flow. It seems very unlikely that we are going to see the 48 ratio again, but it could easily trade back down to the average which would put the price at $148. This mean reversion trade is just another piec of the story that says this stock should trade lower so I agree with the comment on the other thread that says they are looking for a $140-150 type range. I'm looking for $150-155 to exit my trade.

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70.52+0.47(+0.67%)11:05 AMEDT