Salesforce.com (CRM) Gains As Market Dips: What You Should Know
Salesforce.com (CRM) closed the most recent trading day at $164.75, moving +0.14% from the previous trading session. This change outpaced the S&P 500's 1.3% loss on the day. Elsewhere, the Dow lost 0.77%, while the tech-heavy Nasdaq lost 5.51%.
Coming into today, shares of the customer-management software developer had gained 24.08% in the past month. In that same time, the Computer and Technology sector gained 14.67%, while the S&P 500 gained 6.41%.
Salesforce.com will be looking to display strength as it nears its next earnings release. On that day, Salesforce.com is projected to report earnings of $1.36 per share, which would represent year-over-year growth of 61.9%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.99 billion, up 9% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.93 per share and revenue of $30.63 billion. These totals would mark changes of +3.14% and +15.61%, respectively, from last year.
Any recent changes to analyst estimates for Salesforce.com should also be noted by investors. These revisions help to show the ever-changing nature of near-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. 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 0.07% higher. Salesforce.com currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Salesforce.com is currently trading at a Forward P/E ratio of 33.38. This represents a premium compared to its industry's average Forward P/E of 28.24.
Investors should also note that CRM has a PEG ratio of 1.99 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CRM's industry had an average PEG ratio of 2.12 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 94, putting it in the top 38% 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.
To follow CRM in the coming trading sessions, be sure to utilize Zacks.com.
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