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

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Salesforce.com (CRM - Free Report) closed at $229.15 in the latest trading session, marking a +0.65% move from the prior day. This move outpaced the S&P 500's daily loss of 0.1%. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 0.47%.

Coming into today, shares of the customer-management software developer had lost 14.51% in the past month. In that same time, the Computer and Technology sector lost 1%, while the S&P 500 gained 3.67%.

Salesforce.com will be looking to display strength as it nears its next earnings release. In that report, analysts expect Salesforce.com to post earnings of $0.73 per share. This would mark a year-over-year decline of 29.81%. Meanwhile, our latest consensus estimate is calling for revenue of $7.23 billion, up 24.28% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.68 per share and revenue of $26.4 billion, which would represent changes of -4.88% and +24.2%, respectively, from the prior year.

Any recent changes to analyst estimates for Salesforce.com should also be noted by investors. 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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Salesforce.com is currently a Zacks Rank #1 (Strong Buy).

Investors should also note Salesforce.com's current valuation metrics, including its Forward P/E ratio of 48.67. This represents a premium compared to its industry's average Forward P/E of 40.6.

It is also worth noting that CRM currently has a PEG ratio of 2.91. 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. The Computer - Software was holding an average PEG ratio of 2.88 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 101, which puts it in the top 40% 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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