Investors seeking growth at a reasonable cost should explore SALESFORCE INC (NYSE:CRM).

Our stock screening tool has pinpointed SALESFORCE INC (NYSE:CRM) as a growth stock that isn't overvalued. CRM is excelling in various growth indicators while maintaining a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Growth Assessment of 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. CRM has earned a 7 for growth:

• CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.12%, which is quite impressive.
• CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.71% yearly.
• Looking at the last year, CRM shows a quite strong growth in Revenue. The Revenue has grown by 8.72% in the last year.
• The Revenue has been growing by 17.25% on average over the past years. This is quite good.
• The Earnings Per Share is expected to grow by 11.03% 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 8.94% yearly.

ChartMill's Evaluation of Valuation

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. CRM has received a 5 out of 10:

• Based on the Price/Earnings ratio, CRM is valued a bit cheaper than the industry average as 69.72% of the companies are valued more expensively.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 73.59% of the companies listed in the same industry.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 78.17% of the companies listed in the same industry.
• CRM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRM is cheaper than 80.63% of the companies in the same industry.
• The excellent profitability rating of CRM may justify a higher PE ratio.
• CRM's earnings are expected to grow with 12.78% in the coming years. This may justify a more expensive valuation.

Assessing Health for CRM

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. CRM was assigned a score of 7 for health:

• An Altman-Z score of 4.18 indicates that CRM is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 4.18, CRM is in the better half of the industry, outperforming 69.37% of the companies in the same industry.
• CRM has a debt to FCF ratio of 0.68. This is a very positive value and a sign of high solvency as it would only need 0.68 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.68, CRM is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
• A Debt/Equity ratio of 0.14 indicates that CRM is not too dependend on debt financing.
• 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.

Profitability Examination for CRM

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 CRM, the assigned 8 is noteworthy for profitability:

• With a decent Return On Assets value of 6.02%, CRM is doing good in the industry, outperforming 77.82% of the companies in the same industry.
• With a decent Return On Equity value of 10.13%, CRM is doing good in the industry, outperforming 77.11% of the companies in the same industry.
• CRM has a better Return On Invested Capital (8.53%) than 82.39% of its industry peers.
• The 3 year average ROIC (5.83%) for CRM is below the current ROIC(8.53%), indicating increased profibility in the last year.
• CRM has a Profit Margin of 16.35%. This is amongst the best in the industry. CRM outperforms 80.99% of its industry peers.
• In the last couple of years the Profit Margin of CRM has grown nicely.
• The Operating Margin of CRM (20.23%) is better than 87.68% of its industry peers.
• CRM's Operating Margin has improved in the last couple of years.
• With a decent Gross Margin value of 77.19%, CRM is doing good in the industry, outperforming 73.94% of the companies in the same industry.

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

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

Disclaimer

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.