SALESFORCE INC (CRM)
US79466L3024 - Common Stock
Overall CRM gets a fundamental rating of 7 out of 10. We evaluated CRM against 284 industry peers in the Software industry. CRM scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CRM is not overvalued while it is showing excellent growth. This is an interesting combination. This makes CRM very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year CRM was profitable.
CRM had a positive operating cash flow in the past year.
In the past 5 years CRM has always 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 (5.69%) is better than 80.57% of its industry peers.
Looking at the Return On Equity, with a value of 9.17%, CRM is in the better half of the industry, outperforming 79.86% of the companies in the same industry.
The Return On Invested Capital of CRM (7.13%) is better than 83.39% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CRM is significantly below the industry average of 9.85%.
The last Return On Invested Capital (7.13%) for CRM is above the 3 year average (3.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.69% | ||
| ROE | 9.17% | ||
| ROIC | 7.13% |
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 (15.30%) is better than 84.45% of its industry peers.
In the last couple of years the Profit Margin of CRM has grown nicely.
CRM's Operating Margin of 18.45% is amongst the best of the industry. CRM outperforms 89.05% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
CRM has a better Gross Margin (76.00%) than 71.02% of its industry peers.
CRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.45% | ||
| PM (TTM) | 15.3% | ||
| GM | 76% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CRM is destroying value.
The number of shares outstanding for CRM has been reduced compared to 1 year ago.
CRM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, CRM has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.79 indicates that CRM is not in any danger for bankruptcy at the moment.
The Altman-Z score of CRM (4.79) is better than 67.49% of its industry peers.
The Debt to FCF ratio of CRM is 0.83, which is an excellent value as it means it would take CRM, only 0.83 years of fcf income to pay off all of its debts.
CRM has a Debt to FCF ratio of 0.83. This is in the better half of the industry: CRM outperforms 77.03% of its industry peers.
A Debt/Equity ratio of 0.14 indicates that CRM is not too dependend on debt financing.
CRM's Debt to Equity ratio of 0.14 is in line compared to the rest of the industry. CRM outperforms 47.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | 4.79 |
ROIC/WACC0.72
WACC9.9%
2.3 Liquidity
A Current Ratio of 1.11 indicates that CRM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.11, CRM is doing worse than 71.38% of the companies in the same industry.
CRM has a Quick Ratio of 1.11. 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 Quick ratio of 1.11. This is in the lower half of the industry: CRM underperforms 69.61% 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 | 1.11 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 50.34% over the past year.
CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.05% yearly.
Looking at the last year, CRM shows a quite strong growth in Revenue. The Revenue has grown by 11.04% in the last year.
The Revenue has been growing by 21.28% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)50.34%
EPS 3Y18.61%
EPS 5Y26.05%
EPS Q2Q%44.38%
Revenue 1Y (TTM)11.04%
Revenue growth 3Y17.93%
Revenue growth 5Y21.28%
Sales Q2Q%10.74%
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 14.63% yearly.
Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 10.16% on average per year.
EPS Next Y21.76%
EPS Next 2Y16.27%
EPS Next 3Y15.68%
EPS Next 5Y14.63%
Revenue Next Year8.7%
Revenue Next 2Y8.91%
Revenue Next 3Y9.24%
Revenue Next 5Y10.16%
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 estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 28.63, the valuation of CRM can be described as expensive.
Based on the Price/Earnings ratio, CRM is valued a bit cheaper than 73.85% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 24.29. CRM is around the same levels.
CRM is valuated rather expensively with a Price/Forward Earnings ratio of 23.11.
CRM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 74.56% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.35, CRM is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.63 | ||
| Fwd PE | 23.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRM is valued cheaply inside the industry as 82.69% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CRM is valued cheaper than 83.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.93 | ||
| EV/EBITDA | 22.22 |
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 15.68% in the coming years.
PEG (NY)1.32
PEG (5Y)1.1
EPS Next 2Y16.27%
EPS Next 3Y15.68%
5. Dividend
5.1 Amount
With a yearly dividend of 0.65%, CRM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 8.31, CRM pays a better dividend. On top of this CRM pays more dividend than 92.93% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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 2Y16.27%
EPS Next 3Y15.68%
SALESFORCE INC
NYSE:CRM (7/25/2024, 7:04:00 PM)
After market: 256.52 0 (0%)256.52
+6.74 (+2.7%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
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Market Cap248.57B
Analysts
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| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.63 | ||
| Fwd PE | 23.11 | ||
| P/S | |||
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| P/tB | |||
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PEG (NY)1.32
PEG (5Y)1.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.69% | ||
| ROE | 9.17% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 18.45% | ||
| PM (TTM) | 15.3% | ||
| GM | 76% | ||
| FCFM |
ROA(3y)
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Asset Turnover0.37
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 | 1.11 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z |
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High Growth Momentum
Growth
EPS 1Y (TTM)50.34%
EPS 3Y18.61%
EPS 5Y
EPS Q2Q%
EPS Next Y21.76%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.04%
Revenue growth 3Y17.93%
Revenue growth 5Y
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