Shares of Salesforce.com (CRM) are down $1.72, or 1.5%, at $114.35, continuing weakness from yesterday’s downgrade to Sell by Cowen & Co.’s Peter Goldmacher, even though some bulls came to the stock’s defense today.
Citigroup software analyst Walter Pritchard reiterated a Buy rating this morning, and a $152 price target.
Pritchard addresses directly Goldmacher’s concerns over Salesforce’s billings growth slowing, as well as the risk of heightened churn as Salesforce appeared to be pushing unfavorable terms on its software subscribers.
Salesforce executives tell Pritchard that there’s been no “top down” change to invoicing practices, he writes, after speaking with the company.
And he reports that an informal poll of Salesforce customers shows they’re not experiencing any sudden change in the way they’re billed:
We informally surveyed about a dozen salesforce.com small customers�the segment likely impacted by a shift from monthly invoicing�mostly in the technology space. A number of respondents noted that they are currently undergoing a renewal negotiation. Several of these SFDC customers were on monthly or bi-annual billing, but noted that they are not seeing any changes from SFDC that would influence invoicing terms. While our poll is not comprehensive, we would expect that a top-down change would be heard from the customers that we polled.
Merrill Lynch’s Kash Rangan also today writes that the weakness is a buying opportunity, in his opinion.
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