The Salesforce stock price is up 32.27% in 2015, and Money Morning Defense & Tech Specialist Michael A. Robinson remains extremely bullish on Salesforce stock as we head into 2016.
Salesforce.com Inc. (Nasdaq: CRM) is a cloud-computing company that specializes in customer-relationship management (CRM). Salesforce develops sophisticated software tools that allow sales representatives to manage how they interact with clients.
The cloud-computing company launched its first on-demand CRM subscription service in February 2000, and cloud subscriptions now account for 93% of sales.
Salesforce is part of the growing Software-as-a-Service (SaaS) industry, which Robinson expects will have tremendous sales growth.
"SaaS will hit $32.8 billion in sales in 2016," Robinson stated. "That's more than double the sector's $13.5 billion value just five years ago."
CEO Marc Benioff believes Salesforce will have $10 billion in annual sales in the next few years, and Robinson thinks the company could hit $8 billion in sales by 2016.
And part of the reason that Salesforce will reach $8 billion in sales is because Benioff is a visionary...
At the age of 15, the Salesforce CEO created a software company to publish his own video games. By age 16, he was earning $1,500 a month in royalties from his games. And just 10 years later, Benioff became CEO of Oracle Corp. (NYSE: ORCL).
But strong leadership is only part of the reason why the CRM stock price will reach record heights in 2016 and beyond...
You see, Robinson has identified an unstoppable trend that will allow current CRM shareholders to receive triple-digit gains on the Salesforce stock price in just over three years...
The Salesforce Stock Price Will Climb from Huge Industry Growth in 2016
One of Robinson's rules for profitable investing is following unstoppable trends. In this case, the unstoppable trend is the cloud-computing industry.
"You see, I was one of the first to see 'the cloud' for what it really was," Robinson said. "A major tech innovation that was going to change the way we think about computing."
And the growth of the cloud-computing industry is just beginning...
Market Research Media projects the cloud-computing industry will have annual compound growth of 30% by 2020. In just four years, that means the entire cloud-computing field will be worth $270 billion.
You see, Salesforce's top 100 clients are in need of more and more cloud services. Salesforce stated that 97% of its top 100 clients use more than one cloud service. In 2012, only 46% of customers were using more than one Salesforce cloud system.
And all of this extra demand is continually increasing Salesforce's revenue...
Over the last three years, Salesforce has grown its sales by an average of 31%.
"At that rate, sales are doubling roughly every two-and-a-half years," Robinson states.
For Q3 2015, revenue also increased by 50% year over year. That's impressive, considering that revenue in Q3 2014 was up 56% from revenue in Q3 2013.
Because of the consistent revenue growth and strong fundamentals of the company, Robinson believes that the Salesforce stock price will return an average of 21% over the next five years.
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The Salesforce stock price is down 4.83% for the month, but that only creates a cheaper entry point for investors to get in on the unstoppable cloud-computing trend.
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