Don't overlook SALESFORCE INC (NYSE:CRM)—a stock with solid growth prospects and a reasonable valuation.

Here's SALESFORCE INC (NYSE:CRM) for you, a growth stock our stock screener believes is undervalued. CRM is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Growth Analysis for CRM

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. CRM scores a 7 out of 10:

• The Earnings Per Share has grown by an impressive 24.12% over the past year.
• The Earnings Per Share has been growing by 27.71% on average over the past years. This is a very strong growth
• The Revenue has grown by 8.72% in the past year. This is quite good.
• Measured over the past years, CRM shows a quite strong growth in Revenue. The Revenue has been growing by 17.25% on average per year.
• Based on estimates for the next years, CRM will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.03% on average per year.
• The Revenue is expected to grow by 8.94% on average over the next years. This is quite good.

Valuation Examination for CRM

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of CRM, the assigned 5 reflects its valuation:

• Based on the Price/Earnings ratio, CRM is valued a bit cheaper than the industry average as 69.75% of the companies are valued more expensively.
• 72.60% of the companies in the same industry are more expensive than CRM, based on the Price/Forward Earnings ratio.
• CRM's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CRM is cheaper than 78.29% of the companies in the same industry.
• CRM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CRM is cheaper than 80.43% of the companies in the same industry.
• 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 13.04% in the coming years.

How We Gauge Health for CRM

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. CRM has received a 7 out of 10:

• An Altman-Z score of 4.55 indicates that CRM is not in any danger for bankruptcy at the moment.
• CRM has a Altman-Z score of 4.55. This is in the better half of the industry: CRM outperforms 69.04% of its industry peers.
• The Debt to FCF ratio of CRM is 0.68, which is an excellent value as it means it would take CRM, only 0.68 years of fcf income to pay off all of its debts.
• With a decent Debt to FCF ratio value of 0.68, CRM is doing good in the industry, outperforming 75.80% 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.

Profitability Insights: CRM

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. CRM scores a 8 out of 10:

• With a decent Return On Assets value of 6.02%, CRM is doing good in the industry, outperforming 76.87% of the companies in the same industry.
• CRM's Return On Equity of 10.13% is fine compared to the rest of the industry. CRM outperforms 76.87% of its industry peers.
• CRM has a Return On Invested Capital of 8.53%. This is amongst the best in the industry. CRM outperforms 82.21% of its industry peers.
• The last Return On Invested Capital (8.53%) for CRM is above the 3 year average (5.83%), which is a sign of increasing profitability.
• CRM has a better Profit Margin (16.35%) than 81.49% of its industry peers.
• CRM's Profit Margin has improved in the last couple of years.
• With an excellent Operating Margin value of 20.23%, CRM belongs to the best of the industry, outperforming 88.26% of the companies in the same industry.
• CRM's Operating Margin has improved in the last couple of years.
• CRM has a better Gross Margin (77.19%) than 74.73% 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.

Disclaimer

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.