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

Zacks Equity Research

Salesforce.com (CRM) closed at $201.41 in the latest trading session, marking a -0.88% move from the prior day. This change lagged the S&P 500's 0.36% gain on the day. Meanwhile, the Dow gained 0.62%, and the Nasdaq, a tech-heavy index, added 0.35%.

Investors will be hoping for strength from CRM as it approaches 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.

It is also important to note the 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.

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.

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 holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that CRM has a Forward P/E ratio of 68.48 right now. Its industry sports an average Forward P/E of 33.87, so we one might conclude that CRM is trading at a premium comparatively.

Meanwhile, CRM's PEG ratio is currently 3.8. 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 industry currently had an average PEG ratio of 2.58 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 116, putting it in the top 46% 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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