Salesforce.com, which kicked off its CloudForce customer event on Wednesday, has plenty to offer investors, say analysts.



NEW YORK (TheStreet) -- Salesforce.com(:CRM), which kicked off its CloudForce customer event on Wednesday morning, has plenty to offer investors, say analysts, even as the cloud trailblazer's stock heads south.

Shares of Salesforce.com have plunged have plunged more than 17% over the last month, thanks largely to the weaker-than-expected billings growth in the firm's recent third quarter, which pushed its stock to a new 52-week low. Salesforce.com CEO Marc Benioff

Not that investors should be overly concerned, according to Brad Zelnick, an analyst at Macquarie Securities, who said that any suggestions of a cloud bubble are way wide of the mark.

"Salesforce.com are worthy of investor attention," he explained. "This is a great entry point to own what is, by just about all accounts, a leader in an underpenetrated opportunity that has a long distance to go."

"To me, cloud is synonymous with the future of tech; this is not a bubble," added Zelnick. "Don't be fooled by the dotcom in the Salesforce.com name. This is not like what we saw in the late 90ss and the bubble that burst soon thereafter; this is more like an Amazon(:AMZN), a Google(:GOOG), or an eBay(:EBAY) than a Pets.com."

Patrick Walravens, an analyst at JMP Securities, maintained his market outperform rating on Salesforce.com even after its calculated billings growth came in at 29% year over year, compared to the consensus estimate of 33%.

Billings is a method used by analysts to calculate growth from changes in deferred revenue on the company's cash flow statement or balance sheet, combined with revenue.

"Salesforce.com guided revenue up and did everything it could to convince investors that the tone of business remains strong," wrote Walravens, in a recent note. "We think investors should consider using this pullback as a buying opportunity."

The analyst explained that calculated billings can sometimes diverge from actual bookings, and noted that Salesforce.com's new business was ahead of expectations in the third quarter. Additionally, he added, the company has entered its seasonally stronger fourth quarter.

Salesforce.com, which built its reputation selling Customer Relationship Management (CRM) technology, touts a host of cloud products. These encompass CRM-focused areas such as sales force automation and contact management, as well as buzzy private social networks and social media monitoring.

On Wednesday, for example, the company unveiled its new Radian6 social networking cloud, built on technology from Salesforce.com's acquisition of monitoring specialist Radian6 earlier this year.

Salesforce.com describes itself as the first enterprise cloud computing company to exceed a $2.3 billion annual run rate, and expects to reach a $3 billion annual run rate in its fiscal 2013.

Macquarie's Zelnick, however, believes that Silicon Valley has barely scratched the surface of the overall cloud computing opportunity. "This is, ultimately, close to a trillion dollar market," he said. "This is a market opportunity that's currently single-digit percentage penetrated."

Since its founding in 1999, Salesforce.com has racked up more than 100,000 customers, which include big names such as NBC Universal, Prudential Financial(:PRU), Dell(:DELL) and the U.S. State Department.

TheStreet is also a Salesforce.com customer. Daniel Flax, TheStreet's chief information officer, is scheduled to speak at the CloudForce event on Wednesday to discuss the firm's cloud efforts.

"We are aggressively embracing the cloud and understand that our customers want to consume our content on their terms when they want, and on whatever device they've got in their hands at that moment," he explained, in an email. "We are pursuing an All Screens strategy, where our articles, videos, opinions and data tools can be accessed from anywhere on any device."

Flax cited, in particular, the impact of Salesforce.com's Force.com cloud offering for building and running applications. "Having platforms like Force.com to build against gives us the ability to shave significant time off of our build cycles," he said. "Coupled with the abilities that we get right 'out of the box' for reporting and metrics, this gives our business leaders unprecedented visibility into our business."

Shares of Salesforce.com rose $4.01, or 3.63%, to $114.60 on Wednesday.

--Written by James Rogers in New York.

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