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

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In the latest trading session, Salesforce.com (CRM - Free Report) closed at $215.52, marking a -1.25% move from the previous day. This change lagged the S&P 500's 0.04% gain on the day. At the same time, the Dow added 0.19%, and the tech-heavy Nasdaq gained 0.28%.

Heading into today, shares of the customer-management software developer had lost 1.36% over the past month, lagging the Computer and Technology sector's gain of 4.2% and the S&P 500's gain of 3.84% in that time.

CRM will be looking to display strength as it nears its next earnings release. In that report, analysts expect CRM to post earnings of $0.75 per share. This would mark year-over-year growth of 13.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales 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.

It is also important to note the recent changes to analyst estimates for CRM. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 remained stagnant. 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 47.11 right now. This valuation marks a premium compared to its industry's average Forward P/E of 32.33.

Meanwhile, CRM's PEG ratio is currently 3.37. 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 2.98 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 172, which puts it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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