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Salesforce.com (CRM) Dips More Than Broader Markets: What You Should Know

·3 min read

Salesforce.com (CRM) closed at $189.75 in the latest trading session, marking a -0.22% move from the prior day. This change lagged the S&P 500's 0.12% loss on the day. At the same time, the Dow added 0.09%, and the tech-heavy Nasdaq gained 0.4%.

Heading into today, shares of the customer-management software developer had gained 8.36% over the past month, lagging the Computer and Technology sector's gain of 10.34% and outpacing the S&P 500's gain of 8.25% in that time.

Salesforce.com will be looking to display strength as it nears its next earnings release, which is expected to be August 24, 2022. On that day, Salesforce.com is projected to report earnings of $1.02 per share, which would represent a year-over-year decline of 31.08%. Our most recent consensus estimate is calling for quarterly revenue of $7.7 billion, up 21.47% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.75 per share and revenue of $31.73 billion, which would represent changes of -0.63% and +19.78%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Salesforce.com. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.15% lower. Salesforce.com is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Salesforce.com is holding a Forward P/E ratio of 40.02. Its industry sports an average Forward P/E of 30.84, so we one might conclude that Salesforce.com is trading at a premium comparatively.

We can also see that CRM currently has a PEG ratio of 2.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CRM's industry had an average PEG ratio of 2.21 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 164, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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