U.S. Markets closed

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

Zacks Equity Research
Intuit (INTU) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Salesforce.com (CRM) closed the most recent trading day at $158.54, moving -1.29% from the previous trading session. This change lagged the S&P 500's daily gain of 0.18%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.03%.

Prior to today's trading, shares of the customer-management software developer had gained 7.83% over the past month. This has outpaced the Computer and Technology sector's gain of 5.62% and the S&P 500's gain of 4.28% in that time.

Investors will be hoping for strength from CRM as it approaches its next earnings release, which is expected to be March 4, 2019. In that report, analysts expect CRM to post earnings of $0.56 per share. This would mark year-over-year growth of 60%. Meanwhile, our latest consensus estimate is calling for revenue of $3.56 billion, up 24.92% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for CRM. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CRM is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note CRM's current valuation metrics, including its Forward P/E ratio of 58.74. This represents a premium compared to its industry's average Forward P/E of 28.58.

It is also worth noting that CRM currently has a PEG ratio of 2.43. 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 Computer - Software was holding an average PEG ratio of 2.15 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

salesforce.com, inc. (CRM) : Free Stock Analysis Report

To read this article on Zacks.com click here.