Is, Inc a Buy?

How quickly the investment tides turn. Just a couple of weeks ago, announced stellar earnings in line with both its estimates, as well as those of industry analysts. After becoming what CEO Marc Benioff referred to as "the fastest enterprise software company to $5 billion" in revenue, it's no wonder Salesforce's stock price shot up to new 52-week highs.

Fast-forward to today, and all those analyst upgrades that followed Salesforce's strong earnings report were a bit premature -- at least according to the investors that have since taken their money and run. Adding some fuel to the anti-Salesforce fire were recent insider stock sales, including about $11 million worth from Benioff in the last few weeks.

But what, if anything, has really changed since Salesforce announced financial results on Feb. 25 to warrant its sell-off, let alone several recent analyst downgrades? The answer for long-term investors is that it's an even better growth opportunity than it was a couple weeks ago.

A quick recapAs Benioff alluded to multiple times during Salesforce's earnings call, its $5.37 billion in fiscal year 2015 revenue was a record-setting performance, and a whopping 32% improvement over the prior year. Deferred revenue, which is billed sales not yet included on the financial statements, also grew 32%, to $3.32 billion.

As expected, increased expenses associated with integrating new acquisitions, improving infrastructure, and building new data centers to foster international expansion took their toll on Salesforce'sGAAP (including one-time expenses) per-share earnings last quarter. Its $0.10 loss per-share was in line with estimates, as was Salesforce's non-GAAP positive earnings of $0.14 a share.

For the year, operating cash flow jumped 34% to an impressive $1.17 billion, which helped boost Salesforce's cash and equivalents to nearly $1.9 billion, up from last year's $1.32 billion. Of course, ending an earnings call by raising revenue guidance as Salesforce did for its current fiscal year -- to a range of $6.475 billion-$6.52 billion -- is rarely a bad thing. Now the question for investors is: Where is that growth going to come from?

Going forwardIf there was one area that Benioff and Salesforce CFO Mark Hawkins were more excited about than last year's revenue, it was the recent launch of the company's wave analytics solution. This data science and analysis tool has taken off faster than any new product Salesforce has ever introduced, according to management, and it's easy to see why.

As its new-ish partner Microsoft knows first-hand, Software-as-a-Service, or SaaS, delivered via the cloud, in conjunction with business intelligence, or BI, solutions is where the real growth lies. Cloud providers with the ability to collate, analyze, and provide customers with actionable results -- like wave analytics and Microsoft's suite of BI tools -- in addition to offering SaaS services, will win the cloud wars. And now Salesforce has that all-important arrow in its quiver, too.

As is the case with Microsoft's Dynamics CRM, Salesforce's foray into BI means it will butt heads with its partner-rival. However, strategic partnerships offer a quick means of expanding solutions and markets, despite inherent competition, and there are more on the horizon.

One reason Salesforce's expenses jumped last year was its expansion efforts, particularly in Europe. But those expenditures are about to pay off. Before calendar year 2015 ends, Salesforce should have its new data centers in the U.K., France, and Germany fully operational. As it stands, Europe accounts for a mere 18% of total revenue, compared to 73% from the Americas.

Is Salesforce's lack of geographical revenue diversification concerning? Yes, but it also represents a golden opportunity for growth, which Hawkins alluded to on multiple occasions during the recent conference call. Clearly, Salesforce recognizes that international markets offer significant opportunity, and with the new data centers ready to go online, it will be interesting to keep tabs on European sales.

Can Salesforce become the fastest enterprise software company to $10 billion, as per Benioff's pledge? That's the plan, and I wouldn't bet against him. Cutting-edge products like wave analytics, plans for more strategic partnerships akin to the one with Microsoft, and aggressive expansion of its global footprint are all legitimate growth drivers. So what's changed since Salesforce's post-earnings run-up? Nothing. Salesforce was a buy at $70 a share, and now warrants an even higher position on a growth investor's watch list.

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Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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