While growth is established for NYSE:CRM, the stock's valuation remains reasonable.

Last update: Jul 15, 2024

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.

Understanding NYSE:CRM's Growth

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:

The Earnings Per Share has grown by an impressive 50.34% over the past year.
CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.05% yearly.
The Revenue has grown by 11.04% in the past year. This is quite good.
CRM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.28% yearly.
Based on estimates for the next years, CRM will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.63% on average per year.
CRM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.16% yearly.

A Closer Look at 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:

CRM's Price/Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 74.82% of the companies in the same industry.
74.09% of the companies in the same industry are more expensive than CRM, based on the Price/Forward Earnings ratio.
Based on the Enterprise Value to EBITDA ratio, CRM is valued cheaply inside the industry as 80.66% of the companies are valued more expensively.
82.12% of the companies in the same industry are more expensive than CRM, based on the Price/Free Cash Flow ratio.
CRM has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CRM's earnings are expected to grow with 15.68% in the coming years.

Health Analysis for NYSE:CRM

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:CRM has achieved a 7 out of 10:

CRM has an Altman-Z score of 4.86. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
CRM has a better Altman-Z score (4.86) than 67.15% of its industry peers.
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 75.91% of the companies in the same industry.
CRM has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
The current and quick ratio evaluation for CRM is rather negative, while it does have 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 utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:CRM has earned a 8 out of 10:

CRM has a better Return On Assets (5.69%) than 80.29% of its industry peers.
Looking at the Return On Equity, with a value of 9.17%, CRM is in the better half of the industry, outperforming 79.56% of the companies in the same industry.
CRM has a better Return On Invested Capital (7.13%) than 82.85% 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.
With an excellent Profit Margin value of 15.30%, CRM belongs to the best 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 Operating Margin of 18.45%. This is amongst the best in the industry. CRM outperforms 88.69% 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 76.00%, CRM is in the better half of the industry, outperforming 70.44% of the companies in the same industry.

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

For an up to date full fundamental analysis you can check the fundamental 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.