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

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Salesforce.com (CRM) closed the most recent trading day at $189.12, moving +1.83% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.73%. Meanwhile, the Dow gained 0.6%, and the Nasdaq, a tech-heavy index, added 1.13%.

Heading into today, shares of the customer-management software developer had gained 3.41% over the past month, lagging the Computer and Technology sector's gain of 5.28% and outpacing the S&P 500's gain of 2.95% in that time.

Wall Street will be looking for positivity from CRM as it approaches its next earnings report date. This is expected to be February 25, 2020. The company is expected to report EPS of $0.55, down 21.43% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.75 billion, up 31.84% from the prior-year quarter.

Any recent changes to analyst estimates for CRM should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CRM is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, CRM currently has a Forward P/E ratio of 59.85. Its industry sports an average Forward P/E of 33.6, so we one might conclude that CRM is trading at a premium comparatively.

Meanwhile, CRM's PEG ratio is currently 3.19. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.31 based on yesterday's closing prices.

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

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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