SALESFORCE INC (CRM)
US79466L3024 - Common Stock
Taking everything into account, CRM scores 7 out of 10 in our fundamental rating. CRM was compared to 275 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 overvalued while it is showing excellent growth. This is an interesting combination. These ratings could make CRM a good candidate 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.
In the past 5 years CRM has always 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 (4.14%) than 78.55% of its industry peers.
CRM has a better Return On Equity (6.93%) than 79.27% of its industry peers.
The Return On Invested Capital of CRM (6.48%) is better than 83.27% 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 10.17%.
The last Return On Invested Capital (6.48%) for CRM is above the 3 year average (3.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.14% | ||
| ROE | 6.93% | ||
| ROIC | 6.48% |
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
The Profit Margin of CRM (11.87%) is better than 83.64% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
CRM's Operating Margin of 17.21% is amongst the best of the industry. CRM outperforms 88.36% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
CRM's Gross Margin of 75.50% is fine compared to the rest of the industry. CRM outperforms 70.18% of its industry peers.
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 | 17.21% | ||
| PM (TTM) | 11.87% | ||
| GM | 75.5% |
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.
CRM has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CRM has been increased compared to 5 years ago.
Compared to 1 year ago, CRM has an improved debt to assets ratio.
2.2 Solvency
CRM has an Altman-Z score of 4.67. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CRM (4.67) is better than 69.45% of its industry peers.
The Debt to FCF ratio of CRM is 0.99, which is an excellent value as it means it would take CRM, only 0.99 years of fcf income to pay off all of its debts.
CRM's Debt to FCF ratio of 0.99 is fine compared to the rest of the industry. CRM outperforms 77.09% 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 (0.14) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.99 | ||
| Altman-Z | 4.67 |
ROIC/WACC0.67
WACC9.68%
2.3 Liquidity
CRM has a Current Ratio of 1.09. 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 Current ratio value of 1.09, CRM is not doing good in the industry: 73.45% of the companies in the same industry are doing better.
A Quick Ratio of 1.09 indicates that CRM should not have too much problems paying its short term obligations.
CRM has a Quick ratio of 1.09. This is in the lower half of the industry: CRM underperforms 72.00% of its industry peers.
CRM does not score too well on the current and quick ratio evaluation. However, as it has 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 | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 56.38% 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
The Revenue has grown by 11.18% in the past year. This is quite good.
CRM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.28% yearly.
EPS 1Y (TTM)56.38%
EPS 3Y18.61%
EPS 5Y26.05%
EPS growth Q2Q36.31%
Revenue 1Y (TTM)11.18%
Revenue growth 3Y17.93%
Revenue growth 5Y21.28%
Revenue growth Q2Q10.77%
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 13.63% on average per year.
CRM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.59% yearly.
EPS Next Y20.09%
EPS Next 2Y16.35%
EPS Next 3Y16.4%
EPS Next 5Y13.63%
Revenue Next Year9.15%
Revenue Next 2Y9.83%
Revenue Next 3Y10.6%
Revenue Next 5Y11.59%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
CRM is valuated quite expensively with a Price/Earnings ratio of 32.93.
CRM's Price/Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 72.73% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.80, CRM is valued a bit more expensive.
A Price/Forward Earnings ratio of 27.42 indicates a quite expensive valuation of CRM.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than 73.82% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.27. CRM is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.93 | ||
| Fwd PE | 27.42 |
4.2 Price Multiples
CRM's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CRM is cheaper than 80.36% of the companies in the same industry.
CRM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CRM is cheaper than 78.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.56 | ||
| EV/EBITDA | 25.38 |
4.3 Compensation for Growth
The 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.
CRM's earnings are expected to grow with 16.40% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.64
PEG (5Y)1.26
EPS Next 2Y16.35%
EPS Next 3Y16.4%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.53%, which is pretty low.
CRM's Dividend Yield is rather good when compared to the industry average which is at 11.06. CRM pays more dividend than 90.55% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
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 2Y16.35%
EPS Next 3Y16.4%
SALESFORCE INC
NYSE:CRM (4/19/2024, 3:20:40 PM)
After market: 270.37 0 (0%)270.37
-1.55 (-0.57%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
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Market Cap261.72B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
Dividend Growth(5Y)
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.93 | ||
| Fwd PE | 27.42 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
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PEG (NY)1.64
PEG (5Y)1.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.14% | ||
| ROE | 6.93% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.21% | ||
| PM (TTM) | 11.87% | ||
| GM | 75.5% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
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ROICexc(3y)
ROICexc(5y)
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ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
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PM growth 5Y
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F-Score
Asset Turnover0.35
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 | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
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Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)56.38%
EPS 3Y18.61%
EPS 5Y
EPS growth Q2Q
EPS Next Y20.09%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.18%
Revenue growth 3Y17.93%
Revenue growth 5Y
Revenue growth Q2Q
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Revenue Next 3Y
Revenue Next 5Y
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