SALESFORCE INC (CRM) Stock Fundamental Analysis
USA - NYSE:CRM - US79466L3024 - Common Stock
239.74 USD
-6.04 (-2.46%)
239.74 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to CRM. CRM was compared to 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 decent growth rate and is not valued too expensively. This makes CRM very considerable for 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.
Each year in the past 5 years CRM has been profitable.
CRM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of CRM (6.83%) is better than 75.44% of its industry peers.
CRM has a Return On Equity of 10.86%. This is in the better half of the industry: CRM outperforms 77.58% of its industry peers.
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.
CRM's Operating Margin of 21.22% is amongst the best of the industry. CRM outperforms 87.19% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
CRM has a better Gross Margin (77.65%) than 74.73% 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 | 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.
The number of shares outstanding for CRM has been reduced compared to 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 4.87. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.87, CRM is in the better half of the industry, outperforming 67.62% 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.
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.
The Debt to Equity ratio of CRM (0.14) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.68 | ||
| Altman-Z | 4.87 |
ROIC/WACC0.83
WACC11.16%
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's Current ratio of 1.12 is on the low side compared to the rest of the industry. CRM is outperformed by 66.90% of its industry peers.
CRM has a Quick 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 worse Quick ratio (1.12) than 65.48% 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 | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.62% over the past year.
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 8.33% 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
CRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.19% yearly.
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.
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
Based on the Price/Earnings ratio of 22.45, the valuation of CRM can be described as rather expensive.
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.
A Price/Forward Earnings ratio of 18.64 indicates a rather expensive valuation of CRM.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than the industry average as 76.16% of the companies are valued more expensively.
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
CRM's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CRM is cheaper than 81.49% of the companies in the same industry.
82.21% 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 | 18.26 | ||
| EV/EBITDA | 18.93 |
4.3 Compensation for Growth
CRM's 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 12.76% in the coming years. This may justify a more expensive valuation.
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.
Compared to an average industry Dividend Yield of 23.95, CRM pays a better dividend. On top of this CRM pays more dividend than 91.10% of the companies listed in the same industry.
With a Dividend Yield of 0.70, CRM pays less dividend than the S&P500 average, which is at 2.44.
| 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
CRM pays out 23.50% of its income as dividend. This is a 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 | 18.93 |
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 | 4.87 |
F-Score9
WACC11.16%
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%