Salesforce Has Plenty Of Growth Ahead; Drexel Hamilton Initiates At Buy

Salesforce.com, inc. (NYSE: CRM)'s transition to the cloud is still in the early stages, and the company could generate “attractive growth over the next decade,” Drexel Hamilton’s Brian J. White said in a report. He initiated coverage with a Buy rating and a price target of $100.

Salesforce is already the leading SaaS vendor in the world and enjoys a leadership position in the customer relationship management market.

Mastering The Cloud Space

The company has been expanding its cloud offerings, capabilities and ecosystem for a customer base of more than 150,000. White mentioned, however, salesforce’s expansion in the cloud space was still in its initial stages and that the company had opportunity for attractive growth over the next decade.

Salesforce estimates its total addressable market opportunity at $70 billion in 2016 and expects this to reach $105 billion in 2020, representing an 11 percent compound annual growth rate.

The company has expanded its cloud offering with the Demandware acquisition for $2.9 billion, marking its entry into the digital commerce market. Apart from this, the launch of Salesforce Einstein has added Artificial Intelligence to the company’s platform.

“In our view, Salesforce represents the best equity vehicle for investors to play the cloud trend and should be a core technology holding [...] In our view, leveraging the Salesforce platform across clouds is the magic that we believe will continue to differentiate the company’s cloud offerings from its competitors,” White commented.

At last check, shares of salesforce.com were down 0.27 percent at $69.32.