SALESFORCE INC (CRM)
US79466L3024 - Common Stock
We assign a fundamental rating of 7 out of 10 to CRM. CRM was compared to 276 industry peers in the Software industry. Both the health and profitability get an excellent rating, making CRM a very profitable company, without any liquidiy or solvency issues. CRM is growing strongly while it is still valued neutral. This is a good combination! With these ratings, CRM could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year CRM was profitable.
In the past year CRM had a positive cash flow from operations.
Each year in the past 5 years CRM has been profitable.
Each year in the past 5 years CRM had a positive operating cash flow.
1.2 Ratios
CRM has a Return On Assets of 5.69%. This is amongst the best in the industry. CRM outperforms 80.29% of its industry peers.
CRM has a Return On Equity of 9.17%. This is in the better half of the industry: CRM outperforms 79.20% of its industry peers.
CRM's Return On Invested Capital of 7.13% is amongst the best of the industry. CRM outperforms 83.21% of its industry peers.
CRM had an Average Return On Invested Capital over the past 3 years of 3.04%. This is significantly below the industry average of 9.95%.
The last Return On Invested Capital (7.13%) for CRM is above the 3 year average (3.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.69% | ||
| ROE | 9.17% | ||
| ROIC | 7.13% |
ROA(3y)1.96%
ROA(5y)2.45%
ROE(3y)3.26%
ROE(5y)3.99%
ROIC(3y)3.04%
ROIC(5y)2.16%
1.3 Margins
CRM has a Profit Margin of 15.30%. This is amongst the best in the industry. CRM outperforms 84.31% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
CRM has a better Operating Margin (18.45%) than 88.69% of its industry peers.
CRM's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 76.00%, CRM is doing good in the industry, outperforming 69.71% of the companies in the same industry.
In the last couple of years the Gross Margin of CRM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.45% | ||
| PM (TTM) | 15.3% | ||
| GM | 76% |
OM growth 3Y100.32%
OM growth 5Y32.39%
PM growth 3Y-14.76%
PM growth 5Y7.26%
GM growth 3Y0.48%
GM growth 5Y0.4%
2. Health
2.1 Basic Checks
CRM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, CRM has less shares outstanding
The number of shares outstanding for CRM has been increased compared to 5 years ago.
CRM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.51 indicates that CRM is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.51, CRM is doing good in the industry, outperforming 67.52% of the companies in the same industry.
CRM has a debt to FCF ratio of 0.83. This is a very positive value and a sign of high solvency as it would only need 0.83 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.83, CRM is in the better half of the industry, outperforming 75.18% of the companies in the same industry.
CRM has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
CRM's Debt to Equity ratio of 0.14 is in line compared to the rest of the industry. CRM outperforms 47.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | 4.51 |
ROIC/WACC0.72
WACC9.85%
2.3 Liquidity
A Current Ratio of 1.11 indicates that CRM should not have too much problems paying its short term obligations.
CRM has a Current ratio of 1.11. This is in the lower half of the industry: CRM underperforms 71.53% of its industry peers.
CRM has a Quick Ratio of 1.11. This is a normal value and indicates that CRM is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.11, CRM is not doing good in the industry: 69.71% of the companies in the same industry are doing better.
The current and quick ratio evaluation for CRM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 50.34% over the past year.
The Earnings Per Share has been growing by 26.05% on average over the past years. This is a very strong growth
CRM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.04%.
The Revenue has been growing by 21.28% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)50.34%
EPS 3Y18.61%
EPS 5Y26.05%
EPS Q2Q%44.38%
Revenue 1Y (TTM)11.04%
Revenue growth 3Y17.93%
Revenue growth 5Y21.28%
Sales Q2Q%10.74%
3.2 Future
Based on estimates for the next years, CRM will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.53% on average per year.
Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.92% on average per year.
EPS Next Y21.76%
EPS Next 2Y16.27%
EPS Next 3Y15.42%
EPS Next 5Y13.53%
Revenue Next Year8.7%
Revenue Next 2Y8.91%
Revenue Next 3Y9.24%
Revenue Next 5Y9.92%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 25.89, the valuation of CRM can be described as expensive.
75.18% of the companies in the same industry are more expensive than CRM, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of CRM to the average of the S&P500 Index (28.42), we can say CRM is valued inline with the index average.
With a Price/Forward Earnings ratio of 20.90, CRM is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 74.82% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.02, CRM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.89 | ||
| Fwd PE | 20.9 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRM is valued cheaply inside the industry as 82.85% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CRM is valued cheaper than 82.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.83 | ||
| EV/EBITDA | 20.52 |
4.3 Compensation for Growth
CRM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CRM has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CRM's earnings are expected to grow with 15.42% in the coming years.
PEG (NY)1.19
PEG (5Y)0.99
EPS Next 2Y16.27%
EPS Next 3Y15.42%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.70%, which is pretty low.
In the last 3 months the price of CRM has falen by -21.20%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 7.89, CRM pays a better dividend. On top of this CRM pays more dividend than 92.70% of the companies listed in the same industry.
With a Dividend Yield of 0.70, CRM pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
5.2 History
CRM does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y16.27%
EPS Next 3Y15.42%
SALESFORCE INC
NYSE:CRM (6/14/2024, 7:04:00 PM)
After market: 231.7 -0.24 (-0.1%)231.94
+2.91 (+1.27%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
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Market Cap224.75B
Analysts
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| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.89 | ||
| Fwd PE | 20.9 | ||
| P/S | |||
| P/FCF | |||
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| P/B | |||
| P/tB | |||
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PEG (NY)1.19
PEG (5Y)0.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.69% | ||
| ROE | 9.17% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 18.45% | ||
| PM (TTM) | 15.3% | ||
| GM | 76% | ||
| FCFM |
ROA(3y)
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F-Score
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z |
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High Growth Momentum
Growth
EPS 1Y (TTM)50.34%
EPS 3Y18.61%
EPS 5Y
EPS Q2Q%
EPS Next Y21.76%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.04%
Revenue growth 3Y17.93%
Revenue growth 5Y
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