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No clouds for Salesforce. Stock up 8%.

November 21, 2012: 12:30 PM ET

Most investors feel there are few clouds on the horizon for Salesforce.com. The stock has surged this year. But some skeptics are nervous about the valuation.

Salesforce.com (CRM) bulls should be singing the following refrain today. "Hey. Hey! You. You! Get onto my cloud." (Still bummed that I didn't get Rolling Stones tickets for their upcoming show at the new Barclays Center in Brooklyn.)

The cloud computing giant reported earnings and sales on Tuesday that topped analysts' forecasts. Salesforce's stock shot up 8% on the news Wednesday, making the company the best performer in the S&P 500 Wednesday.

It's been a great year for the software as a service firm, led by former Oracle (ORCL) executive Marc Benioff. Salesforce is up more than 55% in 2012. But this is a very polarizing stock and the debate about whether Salesforce is just another hype-fueled tech stocks is playing out on StockTwits.

Fans of Salesforce are convinced that the company's cloud software model is the wave of the future and that the company's strong sales and profit growth justifies the nosebleed valuation of nearly 80 times earnings estimates for its next fiscal year.

Kenshreve: $CRM CEO Marc Benioff on call yesterday: ""No other enterprise software company is growing faster than Salesforce."

Centrifugal: $CRM holding above last night's high. Important bellwether here for high-PE growth; so far quite good

There is no denying that Salesforce's profits are growing at a rapid clip. Analysts are forecasting average annual earnings increases of 27% for the next few years. Oracle, SAP (SAP) and Microsoft (MSFT) have projected growth rates ranging from just 9% to 12% annually.

Some traders also think that Salesforce could continue to scoop up smaller rivals. It's already purchased several start-ups this year.

TechStockRadar: $CRM FQ3 call: Wm. Blair analyst asks about possibility of more Mktg Cloud acquisitions.@Benioff doesn't say no. I'd suggest $ELOQ & $ET.

Interesting. But neither Eloqua (ELOQ) or ExactTarget (ET) stocks were doing much Wednesday. The smaller Eloqua, with a market value of about $600 million, might be more in Salesforce's price range though.  Salesforce did recently buy social networking firm Buddy Media for nearly $700 million. ExactTarget's market value is more than $1.3 billion.

Still, there are many Salesforce skeptics who point out that the company is actually losing money. The earnings per share numbers that compare to analyst estimates exclude stock compensation expenses and costs tied to acquisitions.

LSValue: $CRM Still good at losing money. GAAP EPS -$1.55. Is this the same business model as$GRPN???? Just push revenues with huge sales forces?

1TropicCapital: $CRM will continue to thrive for the momo crowd until it finally blows up - $CMG is an example of this

I think that comparing Salesforce to Groupon (GRPN) may be a bit harsh. But the Chipotle (CMG) reference is fair.

Chipotle is a great company but the stock was valued at an exorbitant price. Any company that is trading for such a high earnings multiple runs the risk of stumbling hard if numbers miss estimates. It doesn't matter that Salesforce may continue to post strong growth ... it also has the burden of needing to top estimates all the time and issue good guidance. So far that hasn't been a problem though.

Anyway, there will be no Best of StockTwits feature tomorrow or Friday (even though U.S. markets will be open for a half day). I hope that everyone enjoys their Thanksgiving. And to non-American readers who won't be gorging on turkey and pigskin (three pro football games!) I hope the next few days are a little less frenetic.

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