SALESFORCE INC (CRM) Stock Fundamental Analysis
NYSE:CRM - New York Stock Exchange, Inc. - US79466L3024 - Common Stock - Currency: USD
Overall CRM gets a fundamental rating of 7 out of 10. We evaluated CRM against 282 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 not valued too expensively and it also shows a decent growth rate. These ratings would make CRM suitable for quality investing!
1. Profitability
1.1 Basic Checks
CRM had positive earnings in the past year.
CRM had a positive operating cash flow in the past year.
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's Return On Assets of 6.29% is fine compared to the rest of the industry. CRM outperforms 77.66% of its industry peers.
Looking at the Return On Equity, with a value of 10.23%, CRM is in the better half of the industry, outperforming 78.72% of the companies in the same industry.
CRM has a Return On Invested Capital of 8.87%. This is amongst the best in the industry. CRM outperforms 84.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CRM is significantly below the industry average of 12.28%.
The last Return On Invested Capital (8.87%) for CRM is above the 3 year average (5.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 10.23% | ||
| ROIC | 8.87% |
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
Looking at the Profit Margin, with a value of 16.08%, CRM belongs to the top of the industry, outperforming 82.27% of the companies in the same industry.
CRM's Profit Margin has improved in the last couple of years.
The Operating Margin of CRM (20.50%) is better than 87.59% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
CRM's Gross Margin of 77.34% is fine compared to the rest of the industry. CRM outperforms 73.40% of its industry peers.
CRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.5% | ||
| PM (TTM) | 16.08% | ||
| GM | 77.34% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CRM is destroying value.
CRM has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, CRM has more shares outstanding
The debt/assets ratio for CRM has been reduced compared to a year ago.
2.2 Solvency
CRM has an Altman-Z score of 4.93. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
CRM has a better Altman-Z score (4.93) than 67.73% of its industry peers.
CRM has a debt to FCF ratio of 0.67. This is a very positive value and a sign of high solvency as it would only need 0.67 years to pay back of all of its debts.
CRM's Debt to FCF ratio of 0.67 is fine compared to the rest of the industry. CRM outperforms 76.60% of its industry peers.
A Debt/Equity ratio of 0.14 indicates that CRM is not too dependend on debt financing.
CRM has a Debt to Equity ratio of 0.14. This is comparable to the rest of the industry: CRM outperforms 50.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 4.93 |
ROIC/WACC0.82
WACC10.81%
2.3 Liquidity
CRM has a Current Ratio of 1.07. 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 Current ratio of 1.07. This is in the lower half of the industry: CRM underperforms 71.63% of its industry peers.
A Quick Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.07, CRM is not doing good in the industry: 70.21% 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 | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.29% over the past year.
CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.71% yearly.
Looking at the last year, CRM shows a small growth in Revenue. The Revenue has grown by 7.97% in the last year.
CRM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.25% yearly.
EPS 1Y (TTM)15.29%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%5.74%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%7.62%
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 2Y11.99%
EPS Next 3Y12.79%
EPS Next 5Y12.04%
Revenue Next Year8.57%
Revenue Next 2Y8.82%
Revenue Next 3Y9.26%
Revenue Next 5Y9.62%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
CRM is valuated rather expensively with a Price/Earnings ratio of 24.98.
Based on the Price/Earnings ratio, CRM is valued a bit cheaper than 74.11% of the companies in the same industry.
CRM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.19 indicates a rather expensive valuation of CRM.
CRM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 75.53% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. CRM is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 20.19 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRM is valued cheaply inside the industry as 81.91% of the companies are valued more expensively.
CRM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRM is cheaper than 82.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.58 | ||
| EV/EBITDA | 20.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of CRM may justify a higher PE ratio.
CRM's earnings are expected to grow with 12.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.06
PEG (5Y)0.9
EPS Next 2Y11.99%
EPS Next 3Y12.79%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.64%, which is pretty low.
CRM's Dividend Yield is rather good when compared to the industry average which is at 33.28. CRM pays more dividend than 91.84% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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
25.00% of the earnings are spent on dividend by CRM. This is a low number and sustainable payout ratio.
DP25%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
258.07
-5.9 (-2.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.85%
Inst Owner Change-0.1%
Ins Owners2.52%
Ins Owner Change0.5%
Market Cap247.61B
Analysts79.67
Price Target360.1 (39.54%)
Short Float %1.51%
Short Ratio1.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
Yearly Dividend1.59
Dividend Growth(5Y)N/A
DP25%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.95%
Min EPS beat(2)0.37%
Max EPS beat(2)5.52%
EPS beat(4)3
Avg EPS beat(4)2.78%
Min EPS beat(4)-2.3%
Max EPS beat(4)7.51%
EPS beat(8)7
Avg EPS beat(8)3.13%
EPS beat(12)11
Avg EPS beat(12)6.7%
EPS beat(16)15
Avg EPS beat(16)12.06%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.42%
Max Revenue beat(2)-0.16%
Revenue beat(4)1
Avg Revenue beat(4)-0.4%
Min Revenue beat(4)-1.42%
Max Revenue beat(4)0.02%
Revenue beat(8)1
Avg Revenue beat(8)-0.54%
Revenue beat(12)2
Avg Revenue beat(12)-0.17%
Revenue beat(16)4
Avg Revenue beat(16)-0.11%
PT rev (1m)-0.28%
PT rev (3m)-5.88%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)1.67%
EPS NY rev (1m)1.49%
EPS NY rev (3m)1.39%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)1.25%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 20.19 | ||
| P/S | 6.42 | ||
| P/FCF | 19.58 | ||
| P/OCF | 18.59 | ||
| P/B | 4.08 | ||
| P/tB | 46.27 | ||
| EV/EBITDA | 20.95 |
EPS(TTM)10.33
EY4%
EPS(NY)12.78
Fwd EY4.95%
FCF(TTM)13.18
FCFY5.11%
OCF(TTM)13.88
OCFY5.38%
SpS40.22
BVpS63.23
TBVpS5.58
PEG (NY)2.06
PEG (5Y)0.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 10.23% | ||
| ROCE | 10.63% | ||
| ROIC | 8.87% | ||
| ROICexc | 11.58% | ||
| ROICexgc | 390.16% | ||
| OM | 20.5% | ||
| PM (TTM) | 16.08% | ||
| GM | 77.34% | ||
| FCFM | 32.77% |
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-Score8
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Debt/EBITDA | 0.74 | ||
| Cap/Depr | 19.59% | ||
| Cap/Sales | 1.75% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 117.34% | ||
| Profit Quality | 203.82% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 4.93 |
F-Score8
WACC10.81%
ROIC/WACC0.82
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)15.29%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%5.74%
EPS Next Y12.13%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
EPS Next 5Y12.04%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%7.62%
Revenue Next Year8.57%
Revenue Next 2Y8.82%
Revenue Next 3Y9.26%
Revenue Next 5Y9.62%
EBIT growth 1Y20.01%
EBIT growth 3Y133.52%
EBIT growth 5Y75.31%
EBIT Next Year35.67%
EBIT Next 3Y18.7%
EBIT Next 5Y15.41%
FCF growth 1Y79.03%
FCF growth 3Y33.02%
FCF growth 5Y27.52%
OCF growth 1Y68.07%
OCF growth 3Y29.7%
OCF growth 5Y24.76%