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

Zacks Equity Research

Salesforce.com (CRM) closed the most recent trading day at $162.75, moving -0.28% from the previous trading session. This change lagged the S&P 500's 0.05% gain on the day. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.11%.

Heading into today, shares of the customer-management software developer had gained 11.66% over the past month, outpacing the Computer and Technology sector's gain of 4.89% and the S&P 500's gain of 4.32% in that time.

Investors will be hoping for strength from CRM as it approaches its next earnings release, which is expected to be December 3, 2019. On that day, CRM is projected to report earnings of $0.65 per share, which would represent year-over-year growth of 6.56%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.43 billion, up 30.72% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.85 per share and revenue of $16.85 billion. These totals would mark changes of +3.64% and +26.84%, respectively, from last year.

Investors might also notice 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.

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. Within the past 30 days, our consensus EPS projection has moved 1.23% higher. CRM is currently a Zacks Rank #3 (Hold).

Digging into valuation, CRM currently has a Forward P/E ratio of 57.36. This represents a premium compared to its industry's average Forward P/E of 30.81.

Meanwhile, CRM's PEG ratio is currently 3.06. 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 2.29 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 40, putting it in the top 16% 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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