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Interested In salesforce.com, inc. (NYSE:CRM)? Here's How It Performed Recently

Simply Wall St

Analyzing salesforce.com, inc.'s (NYSE:CRM) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess CRM's recent performance announced on 31 July 2019 and compare these figures to its long-term trend and industry movements.

See our latest analysis for salesforce.com

Have CRM's earnings improved against past performances and the industry?

CRM's trailing twelve-month earnings (from 31 July 2019) of US$950m has declined by -0.6% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 72%, indicating the rate at which CRM is growing has slowed down. Why is this? Well, let’s take a look at what’s occurring with margins and whether the whole industry is feeling the heat.

NYSE:CRM Income Statement, November 4th 2019

In terms of returns from investment, salesforce.com has fallen short of achieving a 20% return on equity (ROE), recording 5.5% instead. Furthermore, its return on assets (ROA) of 3.1% is below the US Software industry of 6.6%, indicating salesforce.com's are utilized less efficiently. However, its return on capital (ROC), which also accounts for salesforce.com’s debt level, has increased over the past 3 years from 1.6% to 3.0%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 48% to 17% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. I suggest you continue to research salesforce.com to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for CRM’s future growth? Take a look at our free research report of analyst consensus for CRM’s outlook.
  2. Financial Health: Are CRM’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 July 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.