In the world of growth stocks, NYSE:CRM shines as a value proposition.

Last update: Dec 4, 2023

Our stock screener has spotted SALESFORCE INC (NYSE:CRM) as a growth stock which is not overvalued. NYSE:CRM is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

What does the Growth looks like for NYSE:CRM

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:CRM scores a 8 out of 10:

The Earnings Per Share has grown by an impressive 72.34% over the past year.
The Earnings Per Share has been growing by 31.21% on average over the past years. This is a very strong growth
CRM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.08%.
Measured over the past years, CRM shows a very strong growth in Revenue. The Revenue has been growing by 24.36% on average per year.
The Earnings Per Share is expected to grow by 20.34% on average over the next years. This is a very strong growth
CRM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.76% yearly.

How do we evaluate the Valuation for NYSE:CRM?

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:CRM was assigned a score of 6 for valuation:

Based on the Price/Earnings ratio, CRM is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than 75.71% of the companies in the same industry.
Based on the Enterprise Value to EBITDA ratio, CRM is valued cheaply inside the industry as 82.86% of the companies are valued more expensively.
80.36% of the companies in the same industry are more expensive than CRM, based on the Price/Free Cash Flow ratio.
CRM's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
CRM has a very decent profitability rating, which may justify a higher PE ratio.
CRM's earnings are expected to grow with 28.78% in the coming years. This may justify a more expensive valuation.

ChartMill's Evaluation of Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:CRM has received a 5 out of 10:

CRM has an Altman-Z score of 5.35. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.35, CRM is doing good in the industry, outperforming 73.57% of the companies in the same industry.
The Debt to FCF ratio of CRM is 1.07, which is an excellent value as it means it would take CRM, only 1.07 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CRM (1.07) is better than 81.43% of its industry peers.
A Debt/Equity ratio of 0.15 indicates that CRM is not too dependend on debt financing.

Looking at the Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:CRM, the assigned 7 is a significant indicator of profitability:

CRM's Return On Assets of 2.85% is fine compared to the rest of the industry. CRM outperforms 79.29% of its industry peers.
Looking at the Return On Equity, with a value of 4.46%, CRM is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.73%, CRM belongs to the top of the industry, outperforming 80.36% of the companies in the same industry.
The last Return On Invested Capital (4.73%) for CRM is above the 3 year average (0.90%), which is a sign of increasing profitability.
CRM's Profit Margin of 7.63% is amongst the best of the industry. CRM outperforms 83.57% of its industry peers.
The Operating Margin of CRM (15.87%) is better than 88.93% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
Looking at the Gross Margin, with a value of 74.99%, CRM is in the better half of the industry, outperforming 69.29% of the companies in the same industry.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of CRM for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.