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In the latest trading session, Salesforce.com (CRM) closed at $255, marking a -0.05% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 1.81% for the day. Meanwhile, the Dow experienced a rise of 1.56%, and the technology-dominated Nasdaq saw an increase of 2.06%.
Shares of the customer-management software developer witnessed a loss of 6.12% over the previous month, beating the performance of the Computer and Technology sector with its loss of 7.27% and the S&P 500's loss of 6.14%.
The investment community will be paying close attention to the earnings performance of Salesforce.com in its upcoming release. The company is forecasted to report an EPS of $2.54, showcasing a 4.1% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.74 billion, up 6.61% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $11.13 per share and a revenue of $40.78 billion, demonstrating changes of +9.12% and +7.61%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Salesforce.com. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. Right now, Salesforce.com possesses a Zacks Rank of #3 (Hold).
In terms of valuation, Salesforce.com is currently trading at a Forward P/E ratio of 22.92. Its industry sports an average Forward P/E of 23.2, so one might conclude that Salesforce.com is trading at a discount comparatively.
Investors should also note that CRM has a PEG ratio of 1.8 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computer - Software industry currently had an average PEG ratio of 2.05 as of yesterday's close.