SALESFORCE INC (CRM) Stock Fundamental Analysis
NYSE:CRM - New York Stock Exchange, Inc. - US79466L3024 - Common Stock - Currency: USD
CRM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. CRM gets an excellent profitability rating and is at the same time showing great financial health properties. CRM is not valued too expensively and it also shows a decent 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.
CRM had a positive operating cash flow in the past year.
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 6.29%, CRM is in the better half of the industry, outperforming 77.66% of the companies in the same industry.
With a decent Return On Equity value of 10.23%, CRM is doing good in the industry, outperforming 78.72% of the companies in the same industry.
CRM's Return On Invested Capital of 8.87% is amongst the best of the industry. CRM outperforms 84.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CRM is significantly below the industry average of 12.17%.
The last Return On Invested Capital (8.87%) for CRM is above the 3 year average (5.83%), which is a sign of increasing profitability.
| 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
The Profit Margin of CRM (16.08%) is better than 82.27% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
CRM has a better Operating Margin (20.50%) than 87.59% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
CRM has a better Gross Margin (77.34%) than 73.40% 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 | 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
CRM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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 4.91 indicates that CRM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.91, CRM is in the better half of the industry, outperforming 67.02% of the companies in the same industry.
The Debt to FCF ratio of CRM is 0.67, which is an excellent value as it means it would take CRM, only 0.67 years of fcf income to pay off all of its debts.
CRM has a better Debt to FCF ratio (0.67) than 76.60% 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 | 0.67 | ||
| Altman-Z | 4.91 |
ROIC/WACC0.81
WACC10.89%
2.3 Liquidity
A Current Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
The Current ratio of CRM (1.07) is worse than 71.28% of its industry peers.
CRM has a Quick Ratio of 1.07. 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 Quick ratio value of 1.07, CRM is not doing good in the industry: 69.86% of the companies in the same industry are doing better.
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.
CRM shows a small growth in Revenue. In the last year, the Revenue has grown by 7.97%.
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
The Earnings Per Share is expected to grow by 12.04% on average over the next years. This is quite good.
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 2Y11.96%
EPS Next 3Y12.58%
EPS Next 5Y12.04%
Revenue Next Year8.57%
Revenue Next 2Y8.83%
Revenue Next 3Y9.25%
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.
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
With a Price/Earnings ratio of 25.87, CRM can be considered very expensive at the moment.
Based on the Price/Earnings ratio, CRM is valued a bit cheaper than the industry average as 75.18% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.69. CRM is around the same levels.
CRM is valuated rather expensively with a Price/Forward Earnings ratio of 20.92.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 77.66% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of CRM to the average of the S&P500 Index (37.36), we can say CRM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.87 | ||
| Fwd PE | 20.92 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CRM indicates a rather cheap valuation: CRM is cheaper than 82.27% of the companies listed in the same industry.
82.62% 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 | 20.2 | ||
| EV/EBITDA | 20.83 |
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 12.58% in the coming years.
PEG (NY)2.13
PEG (5Y)0.93
EPS Next 2Y11.96%
EPS Next 3Y12.58%
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 30.72, CRM pays a better dividend. On top of this CRM pays more dividend than 91.84% of the companies listed in the same industry.
With a Dividend Yield of 0.64, CRM pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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
25.00% of the earnings are spent on dividend by CRM. This is a low number and sustainable payout ratio.
DP25%
EPS Next 2Y11.96%
EPS Next 3Y12.58%
267.22
+3.63 (+1.38%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.85%
Inst Owner Change-0.29%
Ins Owners2.52%
Ins Owner Change0.83%
Market Cap255.46B
Analysts79.67
Price Target359.96 (34.71%)
Short Float %1.66%
Short Ratio1.99
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)-0.32%
PT rev (3m)-5.92%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)1.69%
EPS NY rev (1m)0%
EPS NY rev (3m)1.48%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)1.25%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.87 | ||
| Fwd PE | 20.92 | ||
| P/S | 6.62 | ||
| P/FCF | 20.2 | ||
| P/OCF | 19.18 | ||
| P/B | 4.21 | ||
| P/tB | 47.73 | ||
| EV/EBITDA | 20.83 |
EPS(TTM)10.33
EY3.87%
EPS(NY)12.77
Fwd EY4.78%
FCF(TTM)13.23
FCFY4.95%
OCF(TTM)13.93
OCFY5.21%
SpS40.37
BVpS63.46
TBVpS5.6
PEG (NY)2.13
PEG (5Y)0.93
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 | 4.91 |
F-Score8
WACC10.89%
ROIC/WACC0.81
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 2Y11.96%
EPS Next 3Y12.58%
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 2Y8.83%
Revenue Next 3Y9.25%
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%