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Salesforce.com (CRM) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Salesforce.com (CRM - Free Report) closed at $228.76, marking a -1.09% move from the previous day. This change lagged the S&P 500's daily loss of 0.02%.

Heading into today, shares of the customer-management software developer had gained 7.1% over the past month, lagging the Computer and Technology sector's gain of 7.32% and outpacing the S&P 500's gain of 6.61% in that time.

Wall Street will be looking for positivity from CRM as it approaches its next earnings report date. In that report, analysts expect CRM to post earnings of $0.88 per share. This would mark year-over-year growth of 25.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.88 billion, up 20.9% from the year-ago period.

CRM's full-year Zacks Consensus Estimates are calling for earnings of $3.44 per share and revenue of $25.7 billion. These results would represent year-over-year changes of -30.08% and +20.94%, respectively.

Investors should also note any recent changes to analyst estimates for CRM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.23% higher within the past month. CRM is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, CRM currently has a Forward P/E ratio of 67.29. For comparison, its industry has an average Forward P/E of 38.21, which means CRM is trading at a premium to the group.

Investors should also note that CRM has a PEG ratio of 3.65 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software was holding an average PEG ratio of 3.1 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 90, putting it in the top 36% 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.

To follow CRM in the coming trading sessions, be sure to utilize Zacks.com.


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