Salesforce Shares are Down on Whitney Tilson’s Comments

Whitney Tilson appeared on CNBC this morning and announced that his firm has established a short position in Salesforce.com (NYSE:CRM) on the basis of the company’s valuation.

Taking a quick look at some valuation metrics, the stock does look rather expensive.  Its trailing P/E ratio is 600, its forward P/E ratio is 69.1, its 5-year expected PEG ratio is 4.38, its price to sales ratio is 9.07, its price to book ratio for the most recent quarter is 12.38, its enterprise value to revenue multiple for the trailing twelve months is 9.04, and its enterprise value to EBITDA ratio for the trailing twelve months is 152.12.

Competitors include Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), and SAP (NYSE:SAP), information about which companies appear below.

  • Salesforce.com, Inc. (NYSE:CRM): The shares recently traded at $122.50, down $7.06, or 5.45%, on the day.  The shares have traded in a 52-week range of $109.21 to $160.12 and its market capitalization is $16.6 billion.  About the company: Salesforce.com, Inc. provides software on demand.  The Company supplies a customer relationship management service to businesses worldwide providing a technology platform for customers and developers to build and run business applications.  Clients use Salesforce.com to manage their customer, sales, and operational data.
  • Microsoft (NASDAQ:MSFT): The shares recently traded at $26.41, down $0.39, or 1.47%, on the day.  The shares have traded in a 52-week range of $23.65 to $29.46 and its market capitalization is $222.08 billion.  About the company: Microsoft Corporation develops, manufactures, licenses, sells, and supports software products.  The Company offers operating system software, server application software, business and consumer applications software, software development tools, and Internet and intranet software.  Microsoft also develops video game consoles and digital music entertainment devices.
  • Oracle Corp. (NASDAQ:ORCL): The shares recently traded at $32.06, down $0.31, or 0.96%, on the day.  The shares have traded in a 52-week range of $24.72 to $36.50 and its market capitalization is $161.73 billion.  About the company: Oracle Corporation supplies software for enterprise information management.  The Company offers databases and relational servers, application development and decision support tools, and enterprise business applications.  Oracle’s software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers.
  • SAP (NYSE:SAP): The shares recently traded at $60.17, up $0.85, or 1.43%, on the day.  The shares have traded in a 52-week range of $46.70 to $68.39 and its market capitalization is $71.58 billion.  About the company: SAP AG is a multinational software company.  The Company develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software, and provides training services.  SAP markets its products and services worldwide.

(Note: Selected financial data are sourced from Yahoo! Finance.  All data are assumed to be accurate.)

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