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Salesforce (CRM) Stock Sinks As Market Gains: Here's Why
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Salesforce (CRM - Free Report) closed the most recent trading day at $176.53, moving -2.59% from the previous trading session. This change lagged the S&P 500's 1.02% gain on the day. Elsewhere, the Dow gained 1.62%, while the tech-heavy Nasdaq added 0.89%.
Shares of the customer-management software developer have depreciated by 2.7% over the course of the past month, underperforming the Computer and Technology sector's gain of 20.71%, and the S&P 500's gain of 12.23%.
The investment community will be closely monitoring the performance of Salesforce in its forthcoming earnings report. In that report, analysts expect Salesforce to post earnings of $3.12 per share. This would mark year-over-year growth of 20.93%. Our most recent consensus estimate is calling for quarterly revenue of $11.06 billion, up 12.51% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $13.15 per share and a revenue of $46.05 billion, representing changes of +5.03% and +10.89%, respectively, from the prior year.
Any recent changes to analyst estimates for Salesforce should also be noted by investors. 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 business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. Salesforce presently features a Zacks Rank of #3 (Hold).
With respect to valuation, Salesforce is currently being traded at a Forward P/E ratio of 13.78. Its industry sports an average Forward P/E of 18.9, so one might conclude that Salesforce is trading at a discount comparatively.
Also, we should mention that CRM has a PEG ratio of 0.93. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software was holding an average PEG ratio of 1.07 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 72, putting it in the top 30% 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Salesforce (CRM) Stock Sinks As Market Gains: Here's Why
Salesforce (CRM - Free Report) closed the most recent trading day at $176.53, moving -2.59% from the previous trading session. This change lagged the S&P 500's 1.02% gain on the day. Elsewhere, the Dow gained 1.62%, while the tech-heavy Nasdaq added 0.89%.
Shares of the customer-management software developer have depreciated by 2.7% over the course of the past month, underperforming the Computer and Technology sector's gain of 20.71%, and the S&P 500's gain of 12.23%.
The investment community will be closely monitoring the performance of Salesforce in its forthcoming earnings report. In that report, analysts expect Salesforce to post earnings of $3.12 per share. This would mark year-over-year growth of 20.93%. Our most recent consensus estimate is calling for quarterly revenue of $11.06 billion, up 12.51% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $13.15 per share and a revenue of $46.05 billion, representing changes of +5.03% and +10.89%, respectively, from the prior year.
Any recent changes to analyst estimates for Salesforce should also be noted by investors. 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 business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. Salesforce presently features a Zacks Rank of #3 (Hold).
With respect to valuation, Salesforce is currently being traded at a Forward P/E ratio of 13.78. Its industry sports an average Forward P/E of 18.9, so one might conclude that Salesforce is trading at a discount comparatively.
Also, we should mention that CRM has a PEG ratio of 0.93. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software was holding an average PEG ratio of 1.07 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 72, putting it in the top 30% 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.