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

Last update: Sep 17, 2024

SALESFORCE INC (NYSE:CRM) has caught the eye of our stock screener as an affordable growth stock. NYSE:CRM is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Understanding NYSE:CRM's Growth Score

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:CRM has received a 8 out of 10:

CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.43%, 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.
Looking at the last year, CRM shows a quite strong growth in Revenue. The Revenue has grown by 10.26% in the last year.
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.
CRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.63% yearly.
CRM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.16% yearly.

Looking at the Valuation

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 5 for valuation:

74.30% of the companies in the same industry are more expensive than CRM, based on the Price/Earnings ratio.
CRM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 73.59% of the companies in the same industry.
78.52% of the companies in the same industry are more expensive than CRM, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CRM indicates a rather cheap valuation: CRM is cheaper than 82.75% of the companies listed in the same industry.
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 15.98% in the coming years.

Looking at the Health

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:CRM scores a 7 out of 10:

An Altman-Z score of 5.13 indicates that CRM is not in any danger for bankruptcy at the moment.
CRM's Altman-Z score of 5.13 is fine compared to the rest of the industry. CRM outperforms 67.25% of its industry peers.
CRM has a debt to FCF ratio of 0.74. This is a very positive value and a sign of high solvency as it would only need 0.74 years to pay back of all of its debts.
The Debt to FCF ratio of CRM (0.74) is better than 75.00% of its industry peers.
CRM has a Debt/Equity ratio of 0.15. 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 assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:CRM was assigned a score of 8 for profitability:

CRM has a Return On Assets of 6.11%. This is amongst the best in the industry. CRM outperforms 80.99% of its industry peers.
Looking at the Return On Equity, with a value of 9.77%, CRM belongs to the top of the industry, outperforming 80.28% of the companies in the same industry.
The Return On Invested Capital of CRM (7.71%) is better than 82.39% of its industry peers.
The 3 year average ROIC (3.04%) for CRM is below the current ROIC(7.71%), indicating increased profibility in the last year.
CRM has a Profit Margin of 15.44%. This is amongst the best in the industry. CRM outperforms 83.10% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
CRM's Operating Margin of 19.06% is amongst the best of the industry. CRM outperforms 88.38% of its industry peers.
CRM's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 76.35%, CRM is in the better half of the industry, outperforming 71.48% of the companies in the same industry.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

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

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.