NYSE:CRM, a growth stock which is not overvalued.

Discover SALESFORCE INC (NYSE:CRM), an undervalued growth gem identified by our stock screener. NYSE:CRM is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

A Closer Look at Growth for NYSE:CRM

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:CRM was assigned a score of 8 for growth:

• CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 50.34%, which is quite impressive.
• Measured over the past years, CRM shows a very strong growth in Earnings Per Share. The EPS has been growing by 26.05% on average per year.
• CRM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.04%.
• The Revenue has been growing by 21.28% on average over the past years. This is a very strong growth!
• CRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.53% yearly.
• Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.92% on average per year.

Understanding NYSE:CRM's Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:CRM scores a 6 out of 10:

• Based on the Price/Earnings ratio, CRM is valued a bit cheaper than 74.45% of the companies in the same industry.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 74.45% of the companies listed in the same industry.
• 81.39% of the companies in the same industry are more expensive than CRM, based on the Enterprise Value to EBITDA ratio.
• Based on the Price/Free Cash Flow ratio, CRM is valued cheaply inside the industry as 81.75% of the companies are valued more expensively.
• 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 15.42% in the coming years.

Deciphering NYSE:CRM's Health Rating

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:CRM has earned a 7 out of 10:

• CRM has an Altman-Z score of 4.67. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
• With a decent Altman-Z score value of 4.67, CRM is doing good in the industry, outperforming 68.25% of the companies in the same industry.
• 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.
• With a decent Debt to FCF ratio value of 0.83, CRM is doing good in the industry, outperforming 75.18% of the companies in the same industry.
• A Debt/Equity ratio of 0.14 indicates that CRM is not too dependend on debt financing.
• 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.

Exploring NYSE:CRM's 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 8 is a significant indicator of profitability:

• Looking at the Return On Assets, with a value of 5.69%, CRM belongs to the top of the industry, outperforming 80.29% of the companies in the same industry.
• CRM has a better Return On Equity (9.17%) than 79.20% of its industry peers.
• CRM has a Return On Invested Capital of 7.13%. This is amongst the best in the industry. CRM outperforms 83.21% of its industry peers.
• 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.
• CRM's Profit Margin of 15.30% is amongst the best of the industry. CRM outperforms 84.31% of its industry peers.
• CRM's Profit Margin has improved in the last couple of years.
• CRM has a better Operating Margin (18.45%) than 88.69% of its industry peers.
• CRM's Operating Margin has improved in the last couple of years.
• CRM has a better Gross Margin (76.00%) than 70.07% of its industry peers.

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 is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.