SalesForce.com Inc.

Stockchase Research Editor: Michael O'Reilly Morgan Stanley and Bank of America have both recently called for a move towards $273-$275 for the CRM share price. Analysts expect organic growth of 17% annually to continue for the customer relationship management solution company. It continues to build cash reserves, estimated up over $2 billion over the past year, to over $6 billion in total. We would buy this with a stop loss at $190, looking to achieve $275 -- upside potential over 20%. Yield 0% (Analysts’ price target is $273.63)

They report a super report last time, yet nobody cared. Maybe it's due to them still needing to close the Slack deal. Be careful. They report Thursday.

It passes the Rule of 40: Revenue growth rate + EBITDA margin. If the sum is greater than 40, the company passes. This means, the company can get away with rapid revenue growth and no profitability, or slower revenue growth and high profitability--two ways to win. A senior growth name, though it hasn't been a high-flyer in a long time. It trades at less than 10x sales, but has been stuck in a holding pattern ever since buying Slack late last year. You can buy this for the long-term.

The Slack acquisition isn't not liked by many, but the CEO is one the best acquirers around, so he thinks it will pay off.

They paid a high price for Slack. She owns MSFT instead of CRM. It comes down to valuation, so if CRM's PE falls, it may be worth owning. Buy a MSFT instead.

Deferred revenues are a key metric and theirs is much better than expected. Fears of the Slack purchase holding back CRM stock is wrong. Their CEO is good at integrating big deals. This deal can lead to strong cross-selling potential

Doesn't get loved like Google or Microsoft. They were chastised for buying Slack at a high price, so the share price consolidated, but in recent weeks CRM has broken out. CRM will continue to deliver and move up to $300 with 20% upside relatively soon. (Analysts’ price target is $274.62)

They've bought a lot of businesses, including Slack. How will they integrate it? Some integrations haven't worked. To compete with Micorsoft in teams and office products, CRM needs to acquire more businesses in coming quarters and even years. This is the big point. The stock may be volatile. That said, CRM has grown very aggressively in recent years. He expects a pullback in coming quarters due to hiccups in acquisitions.

Investor day is coming this Tuesday. Contrary to the street, he thinks the Slack deal made sense. Slack products are terrific and SF needs them to go toe to toe with Microsoft. Slack is a serious company that just reported a fine quarter, though nobody paid attention. Salesforce has a good record in takeovers. The CEO knows what he's doing.

Great software company as we move to the cloud. Dominate their sector. A great hold. You could probably buy and hold and make money. He holds Twilio instead.

Owns Microsoft and entered back in March. You are getting the cloud, entreprise and other businesses. Likes the diversification and growth expectation. You are paying a premium 31x earnings but revenue growth is low double digits which is very good. CRM, you pay higher multiples than Microsoft. Prefers MSFT.