Salesforce.com’s Buy Reiterated

Salesforce.com, Inc. (CRM) is the market leader in the on-demand Customer Relationship Management (CRM) space, and continues to see substantial subscriber and customer growth.

Although the company reported strong first half results and raised full-year revenue guidance, dilution from the InStranet acquisition will result in lower-than-expected EPS for the second half. Though this will penalize the stock, we believe InStranet makes strategic sense, and over the long-term EPS growth will accelerate.

We therefore reiterate our Buy rating on Salesforce.com’s shares but lower our six-month price target to $45.00 given uncertain economic environment.

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