SALESFORCE INC (CRM) Stock Fundamental Analysis
USA - NYSE:CRM - US79466L3024 - Common Stock
242.76 USD
-3.52 (-1.43%)
242.949 USD
+0.19 (+0.08%)
We assign a fundamental rating of 7 out of 10 to CRM. CRM was compared to 280 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 has a decent growth rate and is not valued too expensively. With these ratings, CRM could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
CRM had positive earnings in the past year.
In the past year CRM had a positive cash flow from operations.
CRM had positive earnings in each of the past 5 years.
CRM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CRM has a Return On Assets of 6.83%. This is in the better half of the industry: CRM outperforms 75.36% of its industry peers.
The Return On Equity of CRM (10.86%) is better than 77.50% of its industry peers.
The Return On Invested Capital of CRM (9.32%) is better than 82.86% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CRM is significantly below the industry average of 11.95%.
The last Return On Invested Capital (9.32%) for CRM is above the 3 year average (5.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.83% | ||
| ROE | 10.86% | ||
| ROIC | 9.32% |
ROA(3y)3.46%
ROA(5y)3.61%
ROE(3y)5.81%
ROE(5y)5.94%
ROIC(3y)5.83%
ROIC(5y)3.79%
1.3 Margins
With an excellent Profit Margin value of 16.87%, CRM belongs to the best of the industry, outperforming 81.43% of the companies in the same industry.
CRM's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 21.22%, CRM belongs to the top of the industry, outperforming 87.14% of the companies in the same industry.
In the last couple of years the Operating Margin of CRM has grown nicely.
The Gross Margin of CRM (77.65%) is better than 75.36% of its industry peers.
CRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.22% | ||
| PM (TTM) | 16.87% | ||
| GM | 77.65% |
OM growth 3Y107.25%
OM growth 5Y49.51%
PM growth 3Y44.23%
PM growth 5Y85.88%
GM growth 3Y1.66%
GM growth 5Y0.52%
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
CRM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, CRM has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.89 indicates that CRM is not in any danger for bankruptcy at the moment.
CRM has a better Altman-Z score (4.89) than 68.21% of its industry peers.
CRM has a debt to FCF ratio of 0.68. This is a very positive value and a sign of high solvency as it would only need 0.68 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 0.68, CRM is doing good in the industry, outperforming 77.14% of the companies in the same industry.
A Debt/Equity ratio of 0.14 indicates that CRM is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.14, CRM is in line with its industry, outperforming 50.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.68 | ||
| Altman-Z | 4.89 |
ROIC/WACC0.84
WACC11.04%
2.3 Liquidity
A Current Ratio of 1.12 indicates that CRM should not have too much problems paying its short term obligations.
CRM has a Current ratio of 1.12. This is in the lower half of the industry: CRM underperforms 66.79% of its industry peers.
CRM has a Quick Ratio of 1.12. This is a normal value and indicates that CRM is financially healthy and should not expect problems in meeting its short term obligations.
CRM has a Quick ratio of 1.12. This is in the lower half of the industry: CRM underperforms 65.36% of its industry peers.
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 | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.62%, which is quite good.
The Earnings Per Share has been growing by 27.71% on average over the past years. This is a very strong growth
The Revenue has grown by 8.33% in the past year. This is quite good.
The Revenue has been growing by 17.25% on average over the past years. This is quite good.
EPS 1Y (TTM)13.62%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%13.67%
Revenue 1Y (TTM)8.33%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%9.77%
3.2 Future
CRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.04% yearly.
Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.62% on average per year.
EPS Next Y12.13%
EPS Next 2Y11.95%
EPS Next 3Y12.86%
EPS Next 5Y12.04%
Revenue Next Year8.56%
Revenue Next 2Y8.84%
Revenue Next 3Y9.31%
Revenue Next 5Y9.62%
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
With a Price/Earnings ratio of 22.73, CRM is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 73.21% of the companies listed in the same industry.
CRM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
A Price/Forward Earnings ratio of 19.01 indicates a rather expensive valuation of CRM.
77.14% of the companies in the same industry are more expensive than CRM, based on the Price/Forward Earnings ratio.
CRM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.73 | ||
| Fwd PE | 19.01 |
4.2 Price Multiples
81.79% of the companies in the same industry are more expensive than CRM, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CRM indicates a rather cheap valuation: CRM is cheaper than 83.57% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.57 | ||
| EV/EBITDA | 19.05 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CRM does not grow enough to justify the current Price/Earnings ratio.
CRM has an outstanding profitability rating, which may justify a higher PE ratio.
CRM's earnings are expected to grow with 12.86% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.87
PEG (5Y)0.82
EPS Next 2Y11.95%
EPS Next 3Y12.86%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.69%, which is pretty low.
CRM's Dividend Yield is rather good when compared to the industry average which is at 59.94. CRM pays more dividend than 92.14% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
5.2 History
CRM is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
23.50% of the earnings are spent on dividend by CRM. This is a low number and sustainable payout ratio.
DP23.5%
EPS Next 2Y11.95%
EPS Next 3Y12.86%
242.76
-3.52 (-1.43%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.98%
Inst Owner Change-1.86%
Ins Owners2.52%
Ins Owner Change0.8%
Market Cap232.08B
Analysts79.66
Price Target353.06 (45.44%)
Short Float %1.55%
Short Ratio1.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
Yearly Dividend1.59
Dividend Growth(5Y)N/A
DP23.5%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.05%
Min EPS beat(2)0.37%
Max EPS beat(2)3.72%
EPS beat(4)3
Avg EPS beat(4)1.83%
Min EPS beat(4)-2.3%
Max EPS beat(4)5.52%
EPS beat(8)7
Avg EPS beat(8)2.26%
EPS beat(12)11
Avg EPS beat(12)5.73%
EPS beat(16)15
Avg EPS beat(16)8.56%
Revenue beat(2)0
Avg Revenue beat(2)-0.08%
Min Revenue beat(2)-0.16%
Max Revenue beat(2)0%
Revenue beat(4)1
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-1.42%
Max Revenue beat(4)0.02%
Revenue beat(8)1
Avg Revenue beat(8)-0.53%
Revenue beat(12)2
Avg Revenue beat(12)-0.12%
Revenue beat(16)3
Avg Revenue beat(16)-0.15%
PT rev (1m)-1.92%
PT rev (3m)-2.23%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)2.27%
EPS NY rev (1m)0%
EPS NY rev (3m)1.49%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)-0.12%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.73 | ||
| Fwd PE | 19.01 | ||
| P/S | 5.88 | ||
| P/FCF | 18.57 | ||
| P/OCF | 17.62 | ||
| P/B | 3.78 | ||
| P/tB | 37.31 | ||
| EV/EBITDA | 19.05 |
EPS(TTM)10.68
EY4.4%
EPS(NY)12.77
Fwd EY5.26%
FCF(TTM)13.07
FCFY5.38%
OCF(TTM)13.78
OCFY5.67%
SpS41.32
BVpS64.15
TBVpS6.51
PEG (NY)1.87
PEG (5Y)0.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.83% | ||
| ROE | 10.86% | ||
| ROCE | 11.17% | ||
| ROIC | 9.32% | ||
| ROICexc | 11.72% | ||
| ROICexgc | 153.28% | ||
| OM | 21.22% | ||
| PM (TTM) | 16.87% | ||
| GM | 77.65% | ||
| FCFM | 31.64% |
ROA(3y)3.46%
ROA(5y)3.61%
ROE(3y)5.81%
ROE(5y)5.94%
ROIC(3y)5.83%
ROIC(5y)3.79%
ROICexc(3y)7.18%
ROICexc(5y)4.68%
ROICexgc(3y)84.54%
ROICexgc(5y)53.64%
ROCE(3y)6.99%
ROCE(5y)4.55%
ROICexcg growth 3Y144.43%
ROICexcg growth 5Y51.1%
ROICexc growth 3Y136.01%
ROICexc growth 5Y54.45%
OM growth 3Y107.25%
OM growth 5Y49.51%
PM growth 3Y44.23%
PM growth 5Y85.88%
GM growth 3Y1.66%
GM growth 5Y0.52%
F-Score9
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.68 | ||
| Debt/EBITDA | 0.72 | ||
| Cap/Depr | 20.05% | ||
| Cap/Sales | 1.7% | ||
| Interest Coverage | 36.44 | ||
| Cash Conversion | 112.25% | ||
| Profit Quality | 187.56% | ||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 4.89 |
F-Score9
WACC11.04%
ROIC/WACC0.84
Cap/Depr(3y)19.53%
Cap/Depr(5y)21.06%
Cap/Sales(3y)2.13%
Cap/Sales(5y)2.49%
Profit Quality(3y)1155.13%
Profit Quality(5y)786.34%
High Growth Momentum
Growth
EPS 1Y (TTM)13.62%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%13.67%
EPS Next Y12.13%
EPS Next 2Y11.95%
EPS Next 3Y12.86%
EPS Next 5Y12.04%
Revenue 1Y (TTM)8.33%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%9.77%
Revenue Next Year8.56%
Revenue Next 2Y8.84%
Revenue Next 3Y9.31%
Revenue Next 5Y9.62%
EBIT growth 1Y20.59%
EBIT growth 3Y133.52%
EBIT growth 5Y75.31%
EBIT Next Year36.84%
EBIT Next 3Y18.7%
EBIT Next 5Y15.41%
FCF growth 1Y65.28%
FCF growth 3Y33.02%
FCF growth 5Y27.52%
OCF growth 1Y56.77%
OCF growth 3Y29.7%
OCF growth 5Y24.76%