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

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Salesforce.com (CRM - Free Report) closed at $168.20 in the latest trading session, marking a +1.91% move from the prior day. This change outpaced the S&P 500's 1.06% gain on the day. At the same time, the Dow added 1.05%, and the tech-heavy Nasdaq gained 0.4%.

Heading into today, shares of the customer-management software developer had lost 12.4% over the past month, lagging the Computer and Technology sector's loss of 8.63% and the S&P 500's loss of 8.3% in that time.

Investors will be hoping for strength from Salesforce.com as it approaches its next earnings release. The company is expected to report EPS of $1.02, down 31.08% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.7 billion, up 21.48% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.76 per share and revenue of $31.76 billion, which would represent changes of -0.42% and +19.88%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Salesforce.com. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 has moved 0.11% lower. Salesforce.com is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Salesforce.com is holding a Forward P/E ratio of 34.69. For comparison, its industry has an average Forward P/E of 26.42, which means Salesforce.com is trading at a premium to the group.

We can also see that CRM currently has a PEG ratio of 2.07. 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. CRM's industry had an average PEG ratio of 2.2 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 161, which puts it in the bottom 37% 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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