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Salesforce (CRM) Stock Sinks As Market Gains: Here's Why
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Salesforce (CRM - Free Report) ended the recent trading session at $162.50, demonstrating a -2.45% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a gain of 0.81% for the day. At the same time, the Dow added 0.27%, and the tech-heavy Nasdaq gained 1.3%.
Prior to today's trading, shares of the customer-management software developer had lost 2.54% lagged the Computer and Technology sector's loss of 1.59% and the S&P 500's gain of 1.13%.
The investment community will be paying close attention to the earnings performance of Salesforce in its upcoming release. On that day, Salesforce is projected to report earnings of $3.27 per share, which would represent year-over-year growth of 12.37%. Meanwhile, the latest consensus estimate predicts the revenue to be $11.3 billion, indicating a 10.44% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.12 per share and revenue of $46.09 billion. These totals would mark changes of +12.78% and +10.99%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Salesforce. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Salesforce is holding a Zacks Rank of #3 (Hold) right now.
With respect to valuation, Salesforce is currently being traded at a Forward P/E ratio of 11.8. This denotes a discount relative to the industry average Forward P/E of 19.31.
We can also see that CRM currently has a PEG ratio of 0.76. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.05.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 90, finds itself in the top 37% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
View the Zacks #1 Rank List
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Salesforce (CRM) Stock Sinks As Market Gains: Here's Why
Salesforce (CRM - Free Report) ended the recent trading session at $162.50, demonstrating a -2.45% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a gain of 0.81% for the day. At the same time, the Dow added 0.27%, and the tech-heavy Nasdaq gained 1.3%.
Prior to today's trading, shares of the customer-management software developer had lost 2.54% lagged the Computer and Technology sector's loss of 1.59% and the S&P 500's gain of 1.13%.
The investment community will be paying close attention to the earnings performance of Salesforce in its upcoming release. On that day, Salesforce is projected to report earnings of $3.27 per share, which would represent year-over-year growth of 12.37%. Meanwhile, the latest consensus estimate predicts the revenue to be $11.3 billion, indicating a 10.44% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.12 per share and revenue of $46.09 billion. These totals would mark changes of +12.78% and +10.99%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Salesforce. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Salesforce is holding a Zacks Rank of #3 (Hold) right now.
With respect to valuation, Salesforce is currently being traded at a Forward P/E ratio of 11.8. This denotes a discount relative to the industry average Forward P/E of 19.31.
We can also see that CRM currently has a PEG ratio of 0.76. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.05.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 90, finds itself in the top 37% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.