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 281 industry peers in the Software industry. CRM has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. 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
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.
Each year in the past 5 years CRM had a positive operating cash flow.
1.2 Ratios
The Return On Assets of CRM (6.29%) is better than 77.94% of its industry peers.
With a decent Return On Equity value of 10.23%, CRM is doing good in the industry, outperforming 78.65% of the companies in the same industry.
CRM has a Return On Invested Capital of 8.87%. This is amongst the best in the industry. CRM outperforms 84.34% of its industry peers.
CRM had an Average Return On Invested Capital over the past 3 years of 5.83%. This is significantly below the industry average of 12.11%.
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
CRM's Profit Margin of 16.08% is amongst the best of the industry. CRM outperforms 82.56% of its industry peers.
In the last couple of years the Profit Margin of CRM has grown nicely.
CRM's Operating Margin of 20.50% is amongst the best of the industry. CRM outperforms 87.90% of its industry peers.
CRM's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 77.34%, CRM is doing good in the industry, outperforming 73.67% of the companies in the same industry.
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
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.
Compared to 1 year ago, CRM has an improved debt to assets ratio.
2.2 Solvency
CRM has an Altman-Z score of 4.83. 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 4.83, 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 0.67, 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.
The Debt to FCF ratio of CRM (0.67) is better than 76.51% 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.
With a Debt to Equity ratio value of 0.14, CRM perfoms like the industry average, outperforming 49.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 4.83 |
ROIC/WACC0.87
WACC10.2%
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 71.17% 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.
CRM has a Quick ratio of 1.07. This is in the lower half of the industry: CRM underperforms 69.75% 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 | 1.07 | ||
| 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.
The Revenue has been growing slightly by 7.97% in the past 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
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
The Price/Earnings ratio is 24.27, which indicates a rather expensive current valuation of CRM.
Compared to the rest of the industry, the Price/Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 73.31% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.82. CRM is around the same levels.
Based on the Price/Forward Earnings ratio of 19.63, the valuation of CRM can be described as rather expensive.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than 74.73% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of CRM to the average of the S&P500 Index (36.21), we can say CRM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.27 | ||
| Fwd PE | 19.63 |
4.2 Price Multiples
CRM's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CRM is cheaper than 81.14% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CRM is valued cheaply inside the industry as 81.49% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.95 | ||
| EV/EBITDA | 20.39 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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
PEG (5Y)0.88
EPS Next 2Y11.96%
EPS Next 3Y12.58%
5. Dividend
5.1 Amount
With a yearly dividend of 0.62%, CRM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 31.80, CRM pays a better dividend. On top of this CRM pays more dividend than 91.81% of the companies listed 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 | 0.62% |
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 25.00% of its income as dividend. This is a sustainable payout ratio.
DP25%
EPS Next 2Y11.96%
EPS Next 3Y12.58%
250.74
-7.59 (-2.94%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.85%
Inst Owner Change-0.32%
Ins Owners2.52%
Ins Owner Change0.8%
Market Cap239.71B
Analysts79.67
Price Target359.96 (43.56%)
Short Float %1.66%
Short Ratio1.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
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)-0.04%
PT rev (3m)-4.07%
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)0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.27 | ||
| Fwd PE | 19.63 | ||
| P/S | 6.21 | ||
| P/FCF | 18.95 | ||
| P/OCF | 17.99 | ||
| P/B | 3.95 | ||
| P/tB | 44.79 | ||
| EV/EBITDA | 20.39 |
EPS(TTM)10.33
EY4.12%
EPS(NY)12.77
Fwd EY5.09%
FCF(TTM)13.23
FCFY5.28%
OCF(TTM)13.93
OCFY5.56%
SpS40.37
BVpS63.46
TBVpS5.6
PEG (NY)2
PEG (5Y)0.88
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
WACC10.2%
ROIC/WACC0.87
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%