salesforce.com, inc. (CRM), J2 Global Inc (JCOM): This Cloud Service Business Seems Like a Decent Buy

Salesforce expects to generate an additional $120-$125 million in revenue in the remainder of its 2014 fiscal year with the company’s full-year revenue estimated at around $4 billion. Because ExactTarget is producing losses, the acquisition was estimated to reduce its full year 2014 non-GAAP earnings-per-share to a range of $0.31-$0.33. Salesforce, currently trading just above $38 per share, is worth $22.5 billion on the market. The market values the company as more expensive than its peers, with a valuation that is more than 300 times its trailing EBITDA and 6.8 times its sales.

My foolish take

J2 Global is not crazily expensive at its current trading price, but it is not crazily cheap either. With its growing top line, bottom line and cash flow, it could be a decent stock to purchase at its current trading price. I also like Open Text due to its dividend initiation, growing cash flow and low price-to-sales ratio. Salesforce, with its high valuation and a recent high-priced acquisition, might not deliver a good market return to shareholders in the near future.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Open Text and Salesforce.com. The Motley Fool owns shares of Open Text .

The article This Cloud Service Business Seems Like a Decent Buy originally appeared on Fool.com and is written by Anh HOANG.

Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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