While growth is established for SALESFORCE INC (NYSE:CRM), the stock's valuation remains reasonable.

Our stock screener has singled out SALESFORCE INC (NYSE:CRM) as an attractive growth opportunity. NYSE:CRM is demonstrating remarkable growth potential while maintaining strong financial indicators, making it a reasonably priced option. We'll explore this further.

Understanding NYSE:CRM's Growth Score

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:CRM boasts a 7 out of 10:

• The Earnings Per Share has grown by an impressive 24.12% over the past year.
• Measured over the past years, CRM shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.71% on average per year.
• The Revenue has grown by 8.72% in the past year. This is quite good.
• Measured over the past years, CRM shows a quite strong growth in Revenue. The Revenue has been growing by 17.25% on average per year.
• CRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.23% yearly.
• Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.46% on average per year.

Valuation Examination for NYSE:CRM

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:CRM boasts a 5 out of 10:

• 71.17% of the companies in the same industry are more expensive than CRM, based on the Price/Earnings ratio.
• 71.53% of the companies in the same industry are more expensive than CRM, based on the Price/Forward Earnings ratio.
• 79.36% of the companies in the same industry are more expensive than CRM, based on the Enterprise Value to EBITDA ratio.
• CRM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRM is cheaper than 80.07% of the companies in the same industry.
• The excellent profitability rating of CRM may justify a higher PE ratio.
• CRM's earnings are expected to grow with 13.20% in the coming years. This may justify a more expensive valuation.

Understanding NYSE:CRM's Health Score

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:CRM has earned a 7 out of 10:

• CRM has an Altman-Z score of 4.76. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
• With a decent Altman-Z score value of 4.76, CRM is doing good in the industry, outperforming 66.90% of the companies in the same industry.
• 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 74.02% 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.
• 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.

Profitability Assessment of NYSE:CRM

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:CRM has earned a 8 out of 10:

• The Return On Assets of CRM (6.02%) is better than 78.65% of its industry peers.
• CRM's Return On Equity of 10.13% is fine compared to the rest of the industry. CRM outperforms 79.36% of its industry peers.
• CRM's Return On Invested Capital of 8.53% is amongst the best of the industry. CRM outperforms 82.21% of its industry peers.
• The last Return On Invested Capital (8.53%) for CRM is above the 3 year average (5.83%), which is a sign of increasing profitability.
• CRM's Profit Margin of 16.35% is amongst the best of the industry. CRM outperforms 81.85% of its industry peers.
• In the last couple of years the Profit Margin of CRM has grown nicely.
• CRM has a better Operating Margin (20.23%) than 87.54% of its industry peers.
• In the last couple of years the Operating Margin of CRM has grown nicely.
• CRM's Gross Margin of 77.19% is fine compared to the rest of the industry. CRM outperforms 74.02% of its industry peers.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of CRM

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.