Salesforce.com, Inc. (CRM) is the "most compelling" investment in cloud computing today, according to remarks made by a Guggenheim analyst and reported on by Barron's. Forecasting aggressive growth in sales, Nate Cunningham gave Salesforce.com a $125 price target. (For more, see also: Why Google May Need To Buy Salesforce To Beat Amazon.)

The company's shares traded at $102.42 at the close of business on Monday, November 6, according to Google Finance. At this level,  Salesforce.com stock would need to increase 22% to reach Cunningham's $125 price target. Since these securities were trading at roughly $70.50 at the start of 2017, reaching $125 would produce a more than 75% year-to-date return. 

Robust Sales Growth

While many market observers are skeptical of Salesforce.com's ability to generate strong revenue growth, Cunningham is optimistic about this company's ability to improve its top line, Barron's reported. The view from The Street was that the company's sales growth would dwindle from 23.6% during the fiscal year (FY) ending in January 2018 to 19.8% and then 18.6% during the subsequent fiscal years. However, Cunningham estimated that this growth would reach 21.4% during FY 2019, before declining to 20.5% in FY 2020 and 19.7% in FY 2021. 

Healthy Profit Margins

Cunningham is also bullish about the company's prospects for generating stronger profit margins, according to Barron's. "The company has the highest G&A intensity in its peer group, which we believe is likely related to the cumulative costs of acquiring and integrating multiple clouds, and that as coordination between these business units improves, Salesforce should be able to realize both improving revenue and cost synergies," he wrote. 

He also asserted that the company's financial results should be able to exceed expectations "in the near- to medium-term" as it "generates a growing portion of business from renewals, and realizes G&A leverage." (For more, see also: Salesforce: The Future Is Yours.)

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