SALESFORCE INC (CRM) Stock Fundamental Analysis
NYSE:CRM - New York Stock Exchange, Inc. - US79466L3024 - Common Stock - Currency: USD
Taking everything into account, CRM scores 7 out of 10 in our fundamental rating. CRM was compared to 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 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.
CRM had a positive operating cash flow in the past year.
Each year in the past 5 years CRM has been profitable.
Each year in the past 5 years CRM had a positive operating cash flow.
1.2 Ratios
CRM's Return On Assets of 6.29% is fine compared to the rest of the industry. CRM outperforms 77.66% of its industry peers.
CRM has a better Return On Equity (10.23%) than 78.72% of its industry peers.
CRM has a better Return On Invested Capital (8.87%) than 84.04% 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 12.28%.
The 3 year average ROIC (5.83%) for CRM is below the current ROIC(8.87%), indicating increased profibility in the last year.
| 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's Operating Margin of 20.50% is amongst the best of the industry. CRM outperforms 87.59% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
CRM has a Gross Margin of 77.34%. This is in the better half of the industry: CRM outperforms 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.
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
An Altman-Z score of 4.83 indicates that CRM is not in any danger for bankruptcy at the moment.
CRM has a better Altman-Z score (4.83) than 68.44% of its industry peers.
CRM has a debt to FCF ratio of 0.67. This is a very positive value and a sign of high solvency as it would only need 0.67 years to pay back of all of its debts.
CRM has a Debt to FCF ratio of 0.67. This is in the better half of the industry: CRM outperforms 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's Debt to Equity ratio of 0.14 is in line compared to the rest of the industry. CRM outperforms 50.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 4.83 |
ROIC/WACC0.82
WACC10.81%
2.3 Liquidity
A Current Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.07, CRM is doing worse than 71.63% of the companies in the same industry.
A Quick Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.07, CRM is not doing good in the industry: 70.21% of the companies in the same industry are doing better.
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 | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.29%, which is quite good.
The Earnings Per Share has been growing by 27.71% on average over the past years. This is a very strong growth
Looking at the last year, CRM shows a small growth in Revenue. The Revenue has grown by 7.97% in the last year.
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
CRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.04% yearly.
CRM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.62% yearly.
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
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
The Price/Earnings ratio is 24.98, which indicates a rather expensive current valuation of CRM.
CRM's Price/Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 74.47% of the companies in the same industry.
CRM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
With a Price/Forward Earnings ratio of 20.21, CRM is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 75.53% of the companies listed in the same industry.
CRM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 20.21 |
4.2 Price Multiples
81.91% of the companies in the same industry are more expensive than CRM, based on the Enterprise Value to EBITDA ratio.
CRM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRM is cheaper than 82.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.51 | ||
| EV/EBITDA | 20.37 |
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.
The excellent profitability rating of CRM 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)2.06
PEG (5Y)0.9
EPS Next 2Y11.96%
EPS Next 3Y12.58%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.64%, which is pretty low.
CRM's Dividend Yield is rather good when compared to the industry average which is at 33.31. CRM pays more dividend than 91.84% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, CRM's dividend is way lower than the S&P500 average.
| 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%
258.07
-5.9 (-2.24%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.85%
Inst Owner Change-0.1%
Ins Owners2.52%
Ins Owner Change1.11%
Market Cap246.71B
Analysts79.67
Price Target360.1 (39.54%)
Short Float %1.51%
Short Ratio1.84
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)-0.28%
PT rev (3m)-5.88%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)1.69%
EPS NY rev (1m)1.49%
EPS NY rev (3m)1.39%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)1.25%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)0.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.98 | ||
| Fwd PE | 20.21 | ||
| P/S | 6.39 | ||
| P/FCF | 19.51 | ||
| P/OCF | 18.52 | ||
| P/B | 4.07 | ||
| P/tB | 46.1 | ||
| EV/EBITDA | 20.37 |
EPS(TTM)10.33
EY4%
EPS(NY)12.77
Fwd EY4.95%
FCF(TTM)13.23
FCFY5.13%
OCF(TTM)13.93
OCFY5.4%
SpS40.37
BVpS63.46
TBVpS5.6
PEG (NY)2.06
PEG (5Y)0.9
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 | 4.83 |
F-Score8
WACC10.81%
ROIC/WACC0.82
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%