In the latest trading session, Salesforce.com (CRM) closed at $183.75, marking a +1.97% move from the previous day. This move outpaced the S&P 500's daily gain of 0.7%. At the same time, the Dow added 0.29%, and the tech-heavy Nasdaq gained 1.04%.
Heading into today, shares of the customer-management software developer had gained 13.63% over the past month, outpacing the Computer and Technology sector's gain of 7.4% and the S&P 500's gain of 4.38% in that time.
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 $0.55 per share. This would mark a year-over-year decline of 21.43%. Our most recent consensus estimate is calling for quarterly revenue of $4.75 billion, up 31.84% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.89 per share and revenue of $17 billion. These totals would mark changes of +5.09% and +27.99%, respectively, from last year.
Investors should also note any 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection remained stagnant. CRM is currently sporting a Zacks Rank of #2 (Buy).
Digging into valuation, CRM currently has a Forward P/E ratio of 62.3. Its industry sports an average Forward P/E of 32.93, so we one might conclude that CRM is trading at a premium comparatively.
Also, we should mention that CRM has a PEG ratio of 3.32. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.21 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 88, which puts it in the top 35% 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.
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