NYSE:CRM—A High-Growth Stock Gearing Up for Its Next Upward Move.

In this article we will dive into SALESFORCE INC (NYSE:CRM) as a possible candidate for growth investing. Investors should always do their own research, but we noticed SALESFORCE INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

How do we evaluate the Growth for NYSE:CRM?

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:CRM has earned a 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.
• CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.05% yearly.
• CRM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.04%.
• Measured over the past years, CRM shows a very strong growth in Revenue. The Revenue has been growing by 21.28% on average per year.
• The Earnings Per Share is expected to grow by 14.63% on average over the next years. This is quite good.
• CRM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.16% yearly.

Health Insights: NYSE:CRM

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, 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 4.64. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
• The Altman-Z score of CRM (4.64) is better than 68.98% of its industry peers.
• CRM has a debt to FCF ratio of 0.83. This is a very positive value and a sign of high solvency as it would only need 0.83 years to pay back of all of its debts.
• CRM's Debt to FCF ratio of 0.83 is fine compared to the rest of the industry. CRM outperforms 75.18% of its industry peers.
• 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.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:CRM, the assigned 8 is noteworthy for 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 Return On Equity of 9.17%. This is in the better half of the industry: CRM outperforms 79.20% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 7.13%, CRM belongs to the top of the industry, outperforming 83.21% of the companies in the same industry.
• 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.
• Looking at the Profit Margin, with a value of 15.30%, CRM belongs to the top of the industry, outperforming 84.31% of the companies in the same industry.
• In the last couple of years the Profit Margin of CRM has grown nicely.
• 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 Gross Margin of 76.00%. This is in the better half of the industry: CRM outperforms 70.44% of its industry peers.

How do we evaluate the setup for NYSE:CRM?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:CRM has a 7 as its setup rating, indicating its current consolidation status.

Although the technical rating is bad, CRM does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 241.38. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 236.87, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Our latest full fundamental report of CRM contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of CRM

Keep in mind

This article should in no way be interpreted as advice. 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.