Bernstein Research Reiterates Underperform on salesforce.com on Expected Slow Growth

In a report published Wednesday, Bernstein Research analyst Mark L. Moerdler reiterated an Underperform rating and $29.00 price target on salesforce.com (NYSE: CRM).

In the report, Bernstein Research noted, “Salesforce.com's stock prices-in sustained strong growth and significant margin expansion. We believe these expectations are too optimistic. We see growth slowing in Salesforce.com's core Sales and Service Clouds, and have low expectations for the company's PaaS and collaboration offerings. We believe that the Marketing Cloud has potential but the market is still too new to model revenue that could significantly help growth. We expect competition and technology issues to limit the upside from CRM's PaaS efforts, and at a significantly lower margin than the core SaaS business. Meanwhile we do not believe Chatter has a credible monetization strategy. We also believe hosting costs will go up.”

salesforce.com closed on Tuesday at $42.46.