Salesforce (CRM) ended the recent trading session at $189.80, demonstrating a +1.44% change from the preceding day’s closing price. The stock exceeded the S&P 500, which registered a gain of 1.05% for the day. Elsewhere, the Dow gained 0.69%, while the tech-heavy Nasdaq added 1.64%.
Prior to today’s trading, shares of the customer-management software developer had gained 2.23% lagged the Computer and Technology sector’s gain of 12.58% and the S&P 500’s gain of 8.59%.
Investors will be eagerly watching for the performance of Salesforce in its upcoming earnings disclosure. In that report, analysts expect Salesforce to post earnings of $3.12 per share. This would mark year-over-year growth of 20.93%. Alongside, our most recent consensus estimate is anticipating revenue of $11.06 billion, indicating a 12.51% upward movement from the same quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $13.15 per share and revenue of $46.05 billion. These totals would mark changes of +5.03% and +10.89%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Salesforce. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the business performance and profit potential.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.02% upward. As of now, Salesforce holds a Zacks Rank of #3 (Hold).
From a valuation perspective, Salesforce is currently exchanging hands at a Forward P/E ratio of 14.23. Its industry sports an average Forward P/E of 19.2, so one might conclude that Salesforce is trading at a discount comparatively.
We can additionally observe that CRM currently boasts a PEG ratio of 1. 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 average PEG ratio for the Internet – Software industry stood at 1.13 at the close of the market yesterday.
