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Salesforce.com (CRM) Gains But Lags Market: What You Should Know

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In the latest trading session, Salesforce.com (CRM - Free Report) closed at $147.05, marking a +0.78% move from the previous day. This change lagged the S&P 500's 0.91% gain on the day. Elsewhere, the Dow gained 0.7%, while the tech-heavy Nasdaq added 1.02%.

Prior to today's trading, shares of the customer-management software developer had lost 2.5% over the past month. This has was narrower than the Computer and Technology sector's loss of 2.58% and the S&P 500's loss of 2.74% in that time.

Wall Street will be looking for positivity from CRM as it approaches its next earnings report date. On that day, CRM is projected to report earnings of $0.65 per share, which would represent year-over-year growth of 6.56%. Meanwhile, our latest consensus estimate is calling for revenue of $4.45 billion, up 31.18% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.84 per share and revenue of $16.86 billion. These totals would mark changes of +3.27% and +26.95%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for CRM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 1.31% lower. CRM currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, CRM is holding a Forward P/E ratio of 51.31. This valuation marks a premium compared to its industry's average Forward P/E of 26.69.

Also, we should mention that CRM has a PEG ratio of 2.44. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.11 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 28% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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