Salesforce.com (CRM) Outpaces Stock Market Gains: What You Should Know
Salesforce.com (CRM) closed the most recent trading day at $145.12, moving +1.96% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.29%. Meanwhile, the Dow gained 0.17%, and the Nasdaq, a tech-heavy index, added 0.19%.
Coming into today, shares of the customer-management software developer had lost 6.39% in the past month. In that same time, the Computer and Technology sector lost 0.13%, while the S&P 500 gained 0.32%.
CRM will be looking to display strength as it nears its next earnings release. In that report, analysts expect CRM to post earnings of $0.65 per share. This would mark year-over-year growth of 6.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.45 billion, up 31.16% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.84 per share and revenue of $16.86 billion. These totals would mark changes of +3.27% and +26.95%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for CRM. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.15% lower. CRM is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note CRM's current valuation metrics, including its Forward P/E ratio of 50.08. For comparison, its industry has an average Forward P/E of 27.96, which means CRM is trading at a premium to the group.
It is also worth noting that CRM currently has a PEG ratio of 2.67. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CRM's industry had an average PEG ratio of 2.13 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 60, putting it in the top 24% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.