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Why Salesforce (CRM) Stock Is A Strong Buy Right Now
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Shares of Salesforce (CRM - Free Report) are up over 7% in the last month as the customer relationship management firm continues its impressive run. So, let's take some time to see why Salesforce stock appears to be a strong buy even as it sits near its new high.
Recent News
Salesforce founder and co-CEO Marc Benioff and his wife made headlines this week after they announced their purchase of Time magazine from Meredith Corporation for $190 million. Benioff joins Amazon (AMZN - Free Report) founder and CEO Jeff Bezos, who purchased the Washington Post, as the latest tech giant to buy a historic media company with his own personal fortune. But this shouldn’t really matter to any potential Salesforce stockholders.
In more relevant news, Salesforce’s second-quarter revenues surged 27% to reach $3.28 billion. The company also recently announced that it upgraded its Financial Services Cloud to enable institutions to deliver a more unified customer experience. Plus, Salesforce launched Quip Slides on Tuesday to help it better compete against the likes of Microsoft (MSFT - Free Report) and Google (GOOGL - Free Report) .
Salesforce, which purchased Quip roughly two years ago, now offers a more complete suite of Microsoft Office-like products designed for the cloud. This includes tools for word processing and spreadsheets, and now an advanced slide presentation tool. The firm is clearly ready to continue to add to its productivity offerings to become a more complete cloud-based customer relationship management business.
Stock Price & Valuation
Moving on, shares of Salesforce have soared over 1,000% in the last decade, which crushes its industry’s roughly 400% and the S&P 500’s 230%. More recently, CRM stock has jumped 114% during the last two years. Salesforce stock is also up over 52% since the start of the year. This strong movement comes in well above its industry’s 26% climb and tops its peer group’s 28%—which includes Adobe (ADBE - Free Report) , Oracle (ORCL - Free Report) , VMware , and a few others. Shares of CRM currently sit right below their 52-week and all-time high of $158.79.
Along with this outsized stock price movement comes a pretty sky-high valuation picture. Salesforce stock is currently trading at 124X forward 12-month Zacks Consensus EPS estimates, which represents a massive premium compared to its industry’s 27.4X average. Yet, at this point, Salesforce investors clearly accept its P/E ratio because the company is still in its growth phase.
Outlook
Looking ahead, our current Zacks Consensus Estimate is calling for Salesforce’s third quarter revenues to climb by 25.7% to hit $3.37 billion. CRM’s fiscal 2019 revenues are expected to reach $13.17 billion, which would mark a nearly 26% jump from fiscal 2018.
At the other end of the income statement, investors should be very pleased to see that Salesforce’s adjusted quarterly earnings are projected to climb by 28.2% to hit $0.50 per share, while its full-year EPS figure is expected to skyrocket by roughly 87%.
Bottom Line
Salesforce has earned 18 upward earnings estimate revisions over the last 30 days for its current fiscal year, against zero downward changes. Plus, CRM has received 14 earnings estimate revisions for the following fiscal year, with nearly 100% agreement to the upside during this same period.
Salesforce’s strong positive earnings estimate revision trends help the company earn a Zacks Rank #1 (Strong Buy). On top of that, Salesforce seems ready to continue to expand in the quickly growing customer relationship management industry.
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market.
Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Image: Bigstock
Why Salesforce (CRM) Stock Is A Strong Buy Right Now
Shares of Salesforce (CRM - Free Report) are up over 7% in the last month as the customer relationship management firm continues its impressive run. So, let's take some time to see why Salesforce stock appears to be a strong buy even as it sits near its new high.
Recent News
Salesforce founder and co-CEO Marc Benioff and his wife made headlines this week after they announced their purchase of Time magazine from Meredith Corporation for $190 million. Benioff joins Amazon (AMZN - Free Report) founder and CEO Jeff Bezos, who purchased the Washington Post, as the latest tech giant to buy a historic media company with his own personal fortune. But this shouldn’t really matter to any potential Salesforce stockholders.
In more relevant news, Salesforce’s second-quarter revenues surged 27% to reach $3.28 billion. The company also recently announced that it upgraded its Financial Services Cloud to enable institutions to deliver a more unified customer experience. Plus, Salesforce launched Quip Slides on Tuesday to help it better compete against the likes of Microsoft (MSFT - Free Report) and Google (GOOGL - Free Report) .
Salesforce, which purchased Quip roughly two years ago, now offers a more complete suite of Microsoft Office-like products designed for the cloud. This includes tools for word processing and spreadsheets, and now an advanced slide presentation tool. The firm is clearly ready to continue to add to its productivity offerings to become a more complete cloud-based customer relationship management business.
Stock Price & Valuation
Moving on, shares of Salesforce have soared over 1,000% in the last decade, which crushes its industry’s roughly 400% and the S&P 500’s 230%. More recently, CRM stock has jumped 114% during the last two years. Salesforce stock is also up over 52% since the start of the year. This strong movement comes in well above its industry’s 26% climb and tops its peer group’s 28%—which includes Adobe (ADBE - Free Report) , Oracle (ORCL - Free Report) , VMware , and a few others. Shares of CRM currently sit right below their 52-week and all-time high of $158.79.
Along with this outsized stock price movement comes a pretty sky-high valuation picture. Salesforce stock is currently trading at 124X forward 12-month Zacks Consensus EPS estimates, which represents a massive premium compared to its industry’s 27.4X average. Yet, at this point, Salesforce investors clearly accept its P/E ratio because the company is still in its growth phase.
Outlook
Looking ahead, our current Zacks Consensus Estimate is calling for Salesforce’s third quarter revenues to climb by 25.7% to hit $3.37 billion. CRM’s fiscal 2019 revenues are expected to reach $13.17 billion, which would mark a nearly 26% jump from fiscal 2018.
At the other end of the income statement, investors should be very pleased to see that Salesforce’s adjusted quarterly earnings are projected to climb by 28.2% to hit $0.50 per share, while its full-year EPS figure is expected to skyrocket by roughly 87%.
Bottom Line
Salesforce has earned 18 upward earnings estimate revisions over the last 30 days for its current fiscal year, against zero downward changes. Plus, CRM has received 14 earnings estimate revisions for the following fiscal year, with nearly 100% agreement to the upside during this same period.
Salesforce’s strong positive earnings estimate revision trends help the company earn a Zacks Rank #1 (Strong Buy). On top of that, Salesforce seems ready to continue to expand in the quickly growing customer relationship management industry.
5 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2018 looks to be a pivotal year to get in on another emerging technology expected to rock the market.
Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 5 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Click to see them right now >>