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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 $160.42, marking a -0.53% move from the previous day. This change lagged the S&P 500's 0.13% loss on the day. Meanwhile, the Dow lost 0.33%, and the Nasdaq, a tech-heavy index, added 0.26%.

Prior to today's trading, shares of the customer-management software developer had lost 17.6% over the past month. This has lagged the Computer and Technology sector's loss of 12.85% and the S&P 500's loss of 10.72% in that time.

Wall Street will be looking for positivity from Salesforce.com as it approaches its next earnings report date. This is expected to be May 31, 2022. The company is expected to report EPS of $0.94, down 22.31% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.37 billion, up 23.68% from the year-ago period.

CRM's full-year Zacks Consensus Estimates are calling for earnings of $4.65 per share and revenue of $31.63 billion. These results would represent year-over-year changes of -2.72% and +19.39%, respectively.

Any recent changes to analyst estimates for Salesforce.com should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Salesforce.com currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Salesforce.com is holding a Forward P/E ratio of 34.68. Its industry sports an average Forward P/E of 27.4, so we one might conclude that Salesforce.com is trading at a premium comparatively.

Investors should also note that CRM has a PEG ratio of 2.07 right now. 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 2.06 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 91, putting it in the top 37% 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.

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


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