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

Zacks Equity Research
·3 min read

In the latest trading session, Salesforce.com (CRM) closed at $237.14, marking a -0.54% move from the previous day. This change lagged the S&P 500's 1.2% gain on the day. Meanwhile, the Dow gained 0.53%, and the Nasdaq, a tech-heavy index, added 1.64%.

Coming into today, shares of the customer-management software developer had lost 5.13% in the past month. In that same time, the Computer and Technology sector lost 1.12%, while the S&P 500 lost 2.23%.

CRM will be looking to display strength as it nears its next earnings release. On that day, CRM is projected to report earnings of $0.74 per share, which would represent a year-over-year decline of 1.33%. Meanwhile, our latest consensus estimate is calling for revenue of $5.25 billion, up 16.25% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.74 per share and revenue of $20.77 billion. These totals would mark changes of +25.08% and +21.48%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CRM. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CRM currently has a Zacks Rank of #3 (Hold).

Digging into valuation, CRM currently has a Forward P/E ratio of 63.7. This represents a premium compared to its industry's average Forward P/E of 30.94.

Meanwhile, CRM's PEG ratio is currently 4.07. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software was holding an average PEG ratio of 2.42 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 159, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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