SALESFORCE INC (CRM) Stock Fundamental Analysis
NYSE:CRM - New York Stock Exchange, Inc. - US79466L3024 - Common Stock - Currency: USD
Taking everything into account, CRM scores 7 out of 10 in our fundamental rating. CRM was compared to 282 industry peers in the Software industry. CRM has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. CRM is not valued too expensively and it also shows a decent growth rate. These ratings could make CRM a good candidate 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.
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 better Return On Assets (6.29%) than 77.66% of its industry peers.
CRM has a Return On Equity of 10.23%. This is in the better half of the industry: CRM outperforms 78.72% of its industry peers.
With an excellent Return On Invested Capital value of 8.87%, CRM belongs to the best of the industry, outperforming 84.04% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CRM is significantly below the industry average of 12.26%.
The 3 year average ROIC (5.83%) for CRM is below the current ROIC(8.87%), indicating increased profibility in the last year.
| 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
CRM's Profit Margin of 16.08% is amongst the best of the industry. CRM outperforms 82.27% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 20.50%, CRM belongs to the best of the industry, outperforming 87.59% of the companies in the same industry.
CRM's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 77.34%, CRM is doing good in the industry, outperforming 73.40% 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 | 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.
CRM has more shares outstanding than it did 5 years ago.
CRM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.05 indicates that CRM is not in any danger for bankruptcy at the moment.
CRM's Altman-Z score of 5.05 is fine compared to the rest of the industry. CRM outperforms 68.44% 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.
With a decent Debt to FCF ratio value of 0.67, CRM is doing good in the industry, outperforming 76.60% of the companies in the same industry.
A Debt/Equity ratio of 0.14 indicates that CRM is not too dependend on debt financing.
CRM has a Debt to Equity ratio (0.14) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 5.05 |
ROIC/WACC0.82
WACC10.85%
2.3 Liquidity
A Current Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
CRM has a worse Current ratio (1.07) than 71.99% of its industry peers.
A Quick Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
The Quick ratio of CRM (1.07) is worse than 70.57% 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 | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.29% over the past year.
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 been growing slightly by 7.97% in the past year.
The Revenue has been growing by 17.25% on average over the past years. This is quite good.
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 26.35, CRM can be considered very expensive at the moment.
Based on the Price/Earnings ratio, CRM is valued a bit cheaper than 74.11% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.45. CRM is around the same levels.
Based on the Price/Forward Earnings ratio of 21.30, the valuation of CRM can be described as rather expensive.
74.82% of the companies in the same industry are more expensive than CRM, based on the Price/Forward Earnings ratio.
CRM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.35 | ||
| Fwd PE | 21.3 |
4.2 Price Multiples
81.56% of the companies in the same industry are more expensive than CRM, based on the Enterprise Value to EBITDA ratio.
82.27% of the companies in the same industry are more expensive than CRM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.65 | ||
| EV/EBITDA | 21.64 |
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.
A more expensive valuation may be justified as CRM's earnings are expected to grow with 12.79% in the coming years.
PEG (NY)2.17
PEG (5Y)0.95
EPS Next 2Y11.99%
EPS Next 3Y12.79%
5. Dividend
5.1 Amount
With a yearly dividend of 0.64%, CRM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 16.21, CRM pays a better dividend. On top of this CRM pays more dividend than 91.84% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, 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%
272.15
+2.94 (+1.09%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.85%
Inst Owner Change1.85%
Ins Owners2.52%
Ins Owner Change0.51%
Market Cap261.12B
Analysts78.98
Price Target360.1 (32.32%)
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)-3.14%
PT rev (3m)-6.69%
EPS NQ rev (1m)1.7%
EPS NQ rev (3m)1.68%
EPS NY rev (1m)1.49%
EPS NY rev (3m)1.39%
Revenue NQ rev (1m)1.26%
Revenue NQ rev (3m)1.26%
Revenue NY rev (1m)0.93%
Revenue NY rev (3m)0.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.35 | ||
| Fwd PE | 21.3 | ||
| P/S | 6.77 | ||
| P/FCF | 20.65 | ||
| P/OCF | 19.6 | ||
| P/B | 4.3 | ||
| P/tB | 48.79 | ||
| EV/EBITDA | 21.64 |
EPS(TTM)10.33
EY3.8%
EPS(NY)12.78
Fwd EY4.7%
FCF(TTM)13.18
FCFY4.84%
OCF(TTM)13.88
OCFY5.1%
SpS40.22
BVpS63.23
TBVpS5.58
PEG (NY)2.17
PEG (5Y)0.95
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 | 5.05 |
F-Score8
WACC10.85%
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%