In the latest close session, Salesforce (CRM) was down 4.07% at $180.71. This change lagged the S&P 500’s daily gain of 1.66%. On the other hand, the Dow registered a gain of 1.19%, and the technology-centric Nasdaq increased by 2.78%.
Shares of the customer-management software developer have appreciated by 15.41% over the course of the past month, outperforming the Computer and Technology sector’s loss of 7.65%, and the S&P 500’s loss of 1.49%.
Analysts and investors alike will be keeping a close eye on the performance of Salesforce in its upcoming earnings disclosure. The company is expected to report EPS of $3.27, up 12.37% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $11.3 billion, showing a 10.44% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $14.12 per share and a revenue of $46.09 billion, indicating changes of +12.78% and +10.99%, respectively, from the former 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.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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. Over the past month, there’s been a 0.07% fall in the Zacks Consensus EPS estimate. At present, Salesforce boasts a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Salesforce has a Forward P/E ratio of 13.34 right now. This represents a discount compared to its industry average Forward P/E of 20.68.
Meanwhile, CRM’s PEG ratio is currently 0.74. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. CRM’s industry had an average PEG ratio of 1.18 as of yesterday’s close.
The Internet – Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 147, finds itself in the bottom 41% echelons of all 250+ industries.
