Why Salesforce Is This Firm's Best Idea

Shares of customer relationship software vendor salesforce.com, inc. CRM look attractive at current levels, according to Wedbush.

The Salesforce Analyst

Steven Koenig maintained an Outperform rating on Salesforce and increased the price target from $192 to $217.

The Salesforce Thesis

Fourth-quarter checks by Wedbush point to strong demand for Salesforce implementation services, with no sign of softness, Koenig said in a Wednesday note. (See his track record here.)

The checks suggested strength in Commerce Cloud, adoption of Einstein Analytics and large deals in technology and health care, the analyst said.

Salesforce, according to the analyst, continued to benefit from its "location at the confluence of enterprise spending on digital transformation, customer experience, and cloud."

With the shares having firmed up nicely in the run up to the fourth-quarter results, Koenig said he doesn't see the need for the management to deliver "heroic guidance."

The company is scheduled to report fourth-quarter results Tuesday after the close.

Koenig said he expects strong fourth-quarter execution.

"With 1Q guidance already given and the decks cleared for FY21 upside, and CRM shares trading at 7.8x EV/CY20E revenue even after a nice YTD run, we like the current entry price."

The analyst said Salesforce.com is a Wedbush Best Idea.

CRM Price Action

Salesforce shares were adding 1.14% to $193.23 at the time of publication Wednesday.

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Photo courtesy of Salesforce.