In the latest trading session, Salesforce.com (CRM) closed at $278.23, marking a +1.78% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.44%. Meanwhile, the Dow experienced a rise of 0.7%, and the technology-dominated Nasdaq saw an increase of 0.27%.
Prior to today's trading, shares of the customer-management software developer had gained 12.04% over the past month. This has lagged the Computer and Technology sector's gain of 15.87% and outpaced the S&P 500's gain of 10.62% in that time.
The investment community will be paying close attention to the earnings performance of Salesforce.com in its upcoming release. The company's earnings per share (EPS) are projected to be $2.54, reflecting a 4.1% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $9.74 billion, indicating a 6.61% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $11.11 per share and a revenue of $40.75 billion, demonstrating changes of +8.92% and +7.53%, respectively, from the preceding year.
Investors might also notice recent changes to analyst estimates for Salesforce.com. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.17% lower within the past month. Salesforce.com presently features a Zacks Rank of #3 (Hold).
Looking at valuation, Salesforce.com is presently trading at a Forward P/E ratio of 24.6. Its industry sports an average Forward P/E of 26.45, so one might conclude that Salesforce.com is trading at a discount comparatively.
Investors should also note that CRM has a PEG ratio of 1.94 right now. 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. CRM's industry had an average PEG ratio of 2.28 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 73, putting it in the top 30% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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Salesforce Inc. (CRM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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