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

Zacks Equity Research
·3 min read

Salesforce.com (CRM) closed at $222.40 in the latest trading session, marking a -0.03% move from the prior day. This change lagged the S&P 500's daily gain of 0.13%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.15%.

Coming into today, shares of the customer-management software developer had lost 7.83% in the past month. In that same time, the Computer and Technology sector gained 4.54%, while the S&P 500 gained 2.59%.

Wall Street will be looking for positivity from CRM as it approaches its next earnings report date. On that day, CRM is projected to report earnings of $0.75 per share, which would represent year-over-year growth of 13.64%. Our most recent consensus estimate is calling for quarterly revenue of $5.68 billion, up 17.02% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.63 per share and revenue of $21.11 billion, which would represent changes of +54.85% and +23.47%, respectively, from the prior year.

Any recent changes to analyst estimates for CRM should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 48.45% higher. CRM is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that CRM has a Forward P/E ratio of 48.02 right now. This represents a premium compared to its industry's average Forward P/E of 33.32.

Also, we should mention that CRM has a PEG ratio of 3.43. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.81 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 187, which puts it in the bottom 27% 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.

To follow CRM in the coming trading sessions, be sure to utilize Zacks.com.

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