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

Salesforce.com (CRM) closed at $156.23 in the latest trading session, marking a +0.32% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.2%. Elsewhere, the Dow lost 0.14%, while the tech-heavy Nasdaq lost 0.12%.

Prior to today's trading, shares of the customer-management software developer had gained 2.64% over the past month. This has outpaced the Computer and Technology sector's loss of 4.64% and the S&P 500's loss of 3.29% in that time.

Wall Street will be looking for positivity from Salesforce.com as it approaches its next earnings report date. On that day, Salesforce.com is projected to report earnings of $1.21 per share, which would represent a year-over-year decline of 4.72%. Meanwhile, our latest consensus estimate is calling for revenue of $7.82 billion, up 13.99% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.72 per share and revenue of $30.94 billion, which would represent changes of -1.26% and +16.79%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Salesforce.com. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Salesforce.com is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Salesforce.com has a Forward P/E ratio of 32.99 right now. Its industry sports an average Forward P/E of 23.21, so we 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 1.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CRM's industry had an average PEG ratio of 2.04 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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