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

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In the latest trading session, Salesforce.com (CRM - Free Report) closed at $302.76, marking a +1.02% move from the previous day. This change outpaced the S&P 500's 0.18% gain on the day.

Coming into today, shares of the customer-management software developer had gained 8.88% in the past month. In that same time, the Computer and Technology sector gained 5.57%, while the S&P 500 gained 5.68%.

Investors will be hoping for strength from CRM as it approaches its next earnings release. The company is expected to report EPS of $0.92, down 47.13% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.79 billion, up 25.27% from the prior-year quarter.

CRM's full-year Zacks Consensus Estimates are calling for earnings of $4.40 per share and revenue of $26.3 billion. These results would represent year-over-year changes of -10.57% and +23.73%, respectively.

Any recent changes to analyst estimates for CRM should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection remained stagnant. CRM currently has a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that CRM has a Forward P/E ratio of 68.17 right now. Its industry sports an average Forward P/E of 38.54, so we one might conclude that CRM is trading at a premium comparatively.

We can also see that CRM currently has a PEG ratio of 4.07. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.97 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 101, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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