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

Zacks Equity Research
Lululemon (LULU) closed the most recent trading day at $174.15, moving +0.66% from the previous trading session.

Salesforce.com (CRM) closed the most recent trading day at $160.06, moving +1.97% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.35%. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq added 0.7%.

Coming into today, shares of the customer-management software developer had lost 0.83% in the past month. In that same time, the Computer and Technology sector gained 6.69%, while the S&P 500 gained 5.14%.

Investors will be hoping for strength from CRM as it approaches its next earnings release. In that report, analysts expect CRM to post earnings of $0.61 per share. This would mark a year-over-year decline of 17.57%. Meanwhile, our latest consensus estimate is calling for revenue of $3.68 billion, up 22.55% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.75 per share and revenue of $16.02 billion. These totals would mark changes of 0% and +20.64%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CRM. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 remained stagnant. CRM currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, CRM is holding a Forward P/E ratio of 56.98. This valuation marks a premium compared to its industry's average Forward P/E of 30.74.

We can also see that CRM currently has a PEG ratio of 2.49. 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 2.17 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 24, which puts it in the top 10% 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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