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Salesforce.com Could Rally into Year End

David Becker
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www.iforex.com

Salesforce.com (NYSE:CRM) reported a robust quarter, with revenues crossing the billion-dollar milestone for the first time ever. Third quarter revenues grew 36% year over year to $1.08 billion, ahead of the market’s projections of $1.06. Revenue growth was attributed to the acquisition of ExactTarget. The stock is a candidate for further upside, as investors look for a Santa Claus rally.

The 52-week range for the stock price is $ 36.09 – $58.37. Earnings increased 13% quarter over quarter and the 3-year earnings growth rate is up 12%. Sales increased 36% quarter over quarter and the 3-year sales growth rate is up 35%. The company has a profit margin of 11.95% and debt of 5%.

Recent insider purchases of CRM are a positive sign for future price action. On November 29, 2013 Hilarie Kopelow and officer purchased approximately 53K shares and Daniel Crump, and officer, purchased approximately 43K shares.

The technical picture for CRM is stable. Prices are declining moderately on lower volume. The accumulation / distribution line is declining and is likely to find support near the August lows.

Support on the stock is seen near the 100-day moving average which coincides with a horizontal trend line near 49.50. Additionally support is seen near the 200-day moving average at 45.75. The relative strength index (RSI) is printing near 41, which is on the lower end of the neutral range. Momentum on the stock is flat, but pointing upward as the MACD prints in positive territory.

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