In the latest close session, Salesforce (CRM) was down 2.71% at $240.89. This change lagged the S&P 500’s daily gain of 0.6%. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, added 1.18%.
The customer-management software developer’s shares have seen an increase of 8.95% over the last month, surpassing the Computer and Technology sector’s loss of 6.18% and the S&P 500’s loss of 0.79%.
The investment community will be closely monitoring the performance of Salesforce in its forthcoming earnings report. The company is expected to report EPS of $3.43, up 5.54% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $11.46 billion, indicating a 11.73% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $16.72 per share and a revenue of $46.25 billion, indicating changes of +33.55% and +11.38%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Salesforce. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
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 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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.03% increase. Currently, Salesforce is carrying a Zacks Rank of #2 (Buy).
Looking at its valuation, Salesforce is holding a Forward P/E ratio of 14.81. This valuation marks a discount compared to its industry average Forward P/E of 21.46.
Also, we should mention that CRM has a PEG ratio of 0.86. 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. The Internet – Software industry had an average PEG ratio of 1.27 as trading concluded yesterday.
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.
