SALESFORCE INC (CRM) Stock Fundamental Analysis
USA - NYSE:CRM - US79466L3024 - Common Stock
239.74 USD
-6.04 (-2.46%)
240.61 USD
+0.87 (+0.36%)
CRM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 281 industry peers in the Software industry. CRM gets an excellent profitability rating and is at the same time showing great financial health properties. CRM has a correct valuation and a medium growth rate. 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.
Each year in the past 5 years CRM has been profitable.
In the past 5 years CRM always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.83%, CRM is in the better half of the industry, outperforming 75.44% of the companies in the same industry.
With a decent Return On Equity value of 10.86%, CRM is doing good in the industry, outperforming 77.94% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 9.32%, CRM belongs to the top of the industry, outperforming 82.92% 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 11.98%.
The 3 year average ROIC (5.83%) for CRM is below the current ROIC(9.32%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 16.87%, CRM belongs to the top of the industry, outperforming 81.49% of the companies in the same industry.
CRM's Profit Margin has improved in the last couple of years.
The Operating Margin of CRM (21.22%) is better than 87.19% of its industry peers.
CRM's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 77.65%, CRM is doing good in the industry, outperforming 74.73% of the companies in the same industry.
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
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.
The number of shares outstanding for CRM has been increased compared to 5 years ago.
The debt/assets ratio for CRM has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.77 indicates that CRM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.77, CRM is in the better half of the industry, outperforming 67.97% of the companies in the same industry.
The Debt to FCF ratio of CRM is 0.68, which is an excellent value as it means it would take CRM, only 0.68 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CRM (0.68) is better than 77.94% of its industry peers.
CRM has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
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 | 0.68 | ||
| Altman-Z | 4.77 |
ROIC/WACC0.83
WACC11.19%
2.3 Liquidity
CRM has a Current 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 Current ratio of 1.12. This is in the lower half of the industry: CRM underperforms 66.19% of its industry peers.
A Quick Ratio of 1.12 indicates that CRM should not have too much problems paying its short term obligations.
The Quick ratio of CRM (1.12) is worse than 64.77% 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 | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.62% 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.
The Revenue has grown by 8.33% in the past year. This is quite good.
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)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
Based on estimates for the next years, CRM will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.19% on average per year.
Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.26% on average per year.
EPS Next Y12.75%
EPS Next 2Y12.34%
EPS Next 3Y12.76%
EPS Next 5Y12.19%
Revenue Next Year8.7%
Revenue Next 2Y8.86%
Revenue Next 3Y9.15%
Revenue Next 5Y9.26%
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
A Price/Earnings ratio of 22.45 indicates a rather expensive valuation of CRM.
CRM's Price/Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 74.73% of the companies in the same industry.
When comparing the Price/Earnings ratio of CRM to the average of the S&P500 Index (27.76), we can say CRM is valued inline with the index average.
With a Price/Forward Earnings ratio of 18.64, CRM is valued on the expensive side.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than 76.87% of the companies in the same industry.
CRM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.45 | ||
| Fwd PE | 18.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRM is valued cheaper than 81.49% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CRM is valued cheaply inside the industry as 82.56% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.26 | ||
| EV/EBITDA | 18.44 |
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.
A more expensive valuation may be justified as CRM's earnings are expected to grow with 12.76% in the coming years.
PEG (NY)1.76
PEG (5Y)0.81
EPS Next 2Y12.34%
EPS Next 3Y12.76%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.70%, which is pretty low.
CRM's Dividend Yield is rather good when compared to the industry average which is at 23.95. CRM pays more dividend than 91.10% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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 2Y12.34%
EPS Next 3Y12.76%
239.74
-6.04 (-2.46%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.17%
Inst Owner Change0%
Ins Owners2.53%
Ins Owner Change0.67%
Market Cap228.23B
Analysts79.66
Price Target342.13 (42.71%)
Short Float %1.41%
Short Ratio1.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
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)3.73%
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)-3.1%
PT rev (3m)-4.99%
EPS NQ rev (1m)0.42%
EPS NQ rev (3m)0.4%
EPS NY rev (1m)0.55%
EPS NY rev (3m)0.55%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-0.17%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.45 | ||
| Fwd PE | 18.64 | ||
| P/S | 5.78 | ||
| P/FCF | 18.26 | ||
| P/OCF | 17.33 | ||
| P/B | 3.72 | ||
| P/tB | 36.69 | ||
| EV/EBITDA | 18.44 |
EPS(TTM)10.68
EY4.45%
EPS(NY)12.86
Fwd EY5.36%
FCF(TTM)13.13
FCFY5.48%
OCF(TTM)13.83
OCFY5.77%
SpS41.49
BVpS64.42
TBVpS6.53
PEG (NY)1.76
PEG (5Y)0.81
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 | 4.77 |
F-Score9
WACC11.19%
ROIC/WACC0.83
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 Y12.75%
EPS Next 2Y12.34%
EPS Next 3Y12.76%
EPS Next 5Y12.19%
Revenue 1Y (TTM)8.33%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%9.77%
Revenue Next Year8.7%
Revenue Next 2Y8.86%
Revenue Next 3Y9.15%
Revenue Next 5Y9.26%
EBIT growth 1Y20.59%
EBIT growth 3Y133.52%
EBIT growth 5Y75.31%
EBIT Next Year38.23%
EBIT Next 3Y16.08%
EBIT Next 5Y14.45%
FCF growth 1Y65.28%
FCF growth 3Y33.02%
FCF growth 5Y27.52%
OCF growth 1Y56.77%
OCF growth 3Y29.7%
OCF growth 5Y24.76%