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Salesforce.com (CRM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

Salesforce.com (CRM) closed the most recent trading day at $192.87, moving +0.93% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.4%, and the Nasdaq, a tech-heavy index, added 0.87%.

Coming into today, shares of the customer-management software developer had gained 3.14% in the past month. In that same time, the Computer and Technology sector gained 2.81%, while the S&P 500 gained 1.43%.

CRM will be looking to display strength as it nears its next earnings release, which is expected to be February 25, 2020. In that report, analysts expect CRM to post earnings of $0.55 per share. This would mark a year-over-year decline of 21.43%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.75 billion, up 31.84% from the year-ago period.

Investors might also notice recent changes to analyst estimates for CRM. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.11% higher. CRM is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CRM is currently trading at a Forward P/E ratio of 61.59. This valuation marks a premium compared to its industry's average Forward P/E of 33.65.

Meanwhile, CRM's PEG ratio is currently 3.28. 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. The Computer - Software was holding an average PEG ratio of 2.48 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 52, putting it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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Zacks Investment Research