In the latest trading session, Salesforce.com (CRM – Free Report) closed at $330.66, marking a -1.1% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.22%. On the other hand, the Dow registered a loss of 0.36%, and the technology-centric Nasdaq decreased by 0.16%.
Heading into today, shares of the customer-management software developer had lost 9.12% over the past month, lagging the Computer and Technology sector’s gain of 1.86% and the S&P 500’s loss of 2.36% 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 upcoming EPS is projected at $2.61, signifying a 13.97% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $10.04 billion, showing an 8.06% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $10.03 per share and a revenue of $37.92 billion, indicating changes of +22.02% and +8.79%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Salesforce.com. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To take advantage of this, we’ve established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there’s been a 0.9% fall in the Zacks Consensus EPS estimate. Currently, Salesforce.com is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, Salesforce.com is presently being traded at a Forward P/E ratio of 33.33. Its industry sports an average Forward P/E of 29.49, so one might conclude that Salesforce.com is trading at a premium comparatively.
It is also worth noting that CRM currently has a PEG ratio of 2.25. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. As the market closed yesterday, the Computer – Software industry was having an average PEG ratio of 2.27.
The Computer – Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 86, placing it within the top 35% of over 250 industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don’t forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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