Salesforce.com (CRM) Stock Declines While Market Improves: Some Information for Investors

Salesforce.com (CRM) closed the most recent trading day at $263.97, moving -2.57% from the previous trading session. The stock fell short of the S&P 500, which registered a gain of 0.28% for the day. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 0.09%.

The stock of customer-management software developer has risen by 1.88% in the past month, lagging the Computer and Technology sector's gain of 6.2% and the S&P 500's gain of 4.37%.

The investment community will be closely monitoring the performance of Salesforce.com in its forthcoming earnings report. In that report, analysts expect Salesforce.com to post earnings of $2.77 per share. This would mark year-over-year growth of 8.2%. At the same time, our most recent consensus estimate is projecting a revenue of $10.13 billion, reflecting a 8.66% rise from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $11.3 per share and revenue of $41.17 billion. These totals would mark changes of +10.78% and +8.64%, respectively, from last year.

Any recent changes to analyst estimates for Salesforce.com should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% lower. As of now, Salesforce.com holds a Zacks Rank of #3 (Hold).

Looking at valuation, Salesforce.com is presently trading at a Forward P/E ratio of 23.98. This denotes a discount relative to the industry average Forward P/E of 27.42.

It's also important to note that CRM currently trades at a PEG ratio of 1.86. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computer - Software industry had an average PEG ratio of 2.4 as trading concluded yesterday.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 36, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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