Salesforce.com (CRM) closed the most recent trading day at $189.50, moving -0.76% from the previous trading session. This change lagged the S&P 500's 0.65% loss on the day. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, lost 1.27%.
Heading into today, shares of the customer-management software developer had gained 4.16% over the past month, lagging the Computer and Technology sector's gain of 7.86% and the S&P 500's gain of 7.76% in that time.
CRM will be looking to display strength as it nears its next earnings release. On that day, CRM is projected to report earnings of $0.67 per share, which would represent year-over-year growth of 1.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.90 billion, up 22.56% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.97 per share and revenue of $20.05 billion, which would represent changes of -0.67% and +17.29%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for CRM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CRM currently has a Zacks Rank of #3 (Hold).
Investors should also note CRM's current valuation metrics, including its Forward P/E ratio of 64.36. Its industry sports an average Forward P/E of 32.27, so we one might conclude that CRM is trading at a premium comparatively.
It is also worth noting that CRM currently has a PEG ratio of 3.58. 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 2.8 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 113, putting it in the top 45% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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