SALESFORCE INC (1CRM.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1CRM - US79466L3024 - Common Stock
192.12 EUR
+2.62 (+1.38%)
1CRM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 114 industry peers in the Software industry. While 1CRM belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. 1CRM has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- 1CRM had positive earnings in the past year.
- 1CRM had a positive operating cash flow in the past year.
- Each year in the past 5 years 1CRM has been profitable.
- 1CRM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of 1CRM (7.59%) is better than 63.16% of its industry peers.
- 1CRM's Return On Equity of 12.03% is in line compared to the rest of the industry. 1CRM outperforms 56.14% of its industry peers.
- 1CRM has a better Return On Invested Capital (10.05%) than 70.18% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for 1CRM is significantly below the industry average of 13.49%.
- The 3 year average ROIC (5.83%) for 1CRM is below the current ROIC(10.05%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.59% | ||
| ROE | 12.03% | ||
| ROIC | 10.05% |
ROA(3y)3.46%
ROA(5y)3.61%
ROE(3y)5.81%
ROE(5y)5.94%
ROIC(3y)5.83%
ROIC(5y)3.79%
1.3 Margins
- The Profit Margin of 1CRM (17.91%) is better than 71.05% of its industry peers.
- In the last couple of years the Profit Margin of 1CRM has grown nicely.
- Looking at the Operating Margin, with a value of 22.03%, 1CRM is in the better half of the industry, outperforming 78.07% of the companies in the same industry.
- 1CRM's Operating Margin has improved in the last couple of years.
- 1CRM's Gross Margin of 77.73% is fine compared to the rest of the industry. 1CRM outperforms 64.04% of its industry peers.
- 1CRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.03% | ||
| PM (TTM) | 17.91% | ||
| GM | 77.73% |
OM growth 3Y107.25%
OM growth 5Y49.51%
PM growth 3Y44.23%
PM growth 5Y85.88%
GM growth 3Y1.66%
GM growth 5Y0.52%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 1CRM is destroying value.
- Compared to 1 year ago, 1CRM has less shares outstanding
- 1CRM has more shares outstanding than it did 5 years ago.
- 1CRM has a better debt/assets ratio than last year.
2.2 Solvency
- 1CRM has an Altman-Z score of 4.70. This indicates that 1CRM is financially healthy and has little risk of bankruptcy at the moment.
- 1CRM's Altman-Z score of 4.70 is fine compared to the rest of the industry. 1CRM outperforms 67.54% of its industry peers.
- The Debt to FCF ratio of 1CRM is 0.65, which is an excellent value as it means it would take 1CRM, only 0.65 years of fcf income to pay off all of its debts.
- 1CRM has a Debt to FCF ratio of 0.65. This is amongst the best in the industry. 1CRM outperforms 84.21% of its industry peers.
- A Debt/Equity ratio of 0.14 indicates that 1CRM is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.14, 1CRM is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.65 | ||
| Altman-Z | 4.7 |
ROIC/WACC0.92
WACC10.93%
2.3 Liquidity
- A Current Ratio of 0.98 indicates that 1CRM may have some problems paying its short term obligations.
- 1CRM's Current ratio of 0.98 is on the low side compared to the rest of the industry. 1CRM is outperformed by 72.81% of its industry peers.
- A Quick Ratio of 0.98 indicates that 1CRM may have some problems paying its short term obligations.
- 1CRM has a worse Quick ratio (0.98) than 71.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.98 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 18.76% over the past year.
- 1CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.71% yearly.
- 1CRM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.41%.
- Measured over the past years, 1CRM shows a quite strong growth in Revenue. The Revenue has been growing by 17.25% on average per year.
EPS 1Y (TTM)18.76%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%34.85%
Revenue 1Y (TTM)8.41%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%8.63%
3.2 Future
- 1CRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.75% yearly.
- The Revenue is expected to grow by 9.51% on average over the next years. This is quite good.
EPS Next Y16.58%
EPS Next 2Y14%
EPS Next 3Y13.91%
EPS Next 5Y14.75%
Revenue Next Year9.34%
Revenue Next 2Y10.17%
Revenue Next 3Y9.88%
Revenue Next 5Y9.51%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- 1CRM is valuated rather expensively with a Price/Earnings ratio of 19.58.
- 80.70% of the companies in the same industry are more expensive than 1CRM, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, 1CRM is valued a bit cheaper.
- 1CRM is valuated rather expensively with a Price/Forward Earnings ratio of 17.04.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of 1CRM indicates a somewhat cheap valuation: 1CRM is cheaper than 79.82% of the companies listed in the same industry.
- 1CRM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.58 | ||
| Fwd PE | 17.04 |
4.2 Price Multiples
- 1CRM's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. 1CRM is cheaper than 63.16% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, 1CRM is valued cheaply inside the industry as 81.58% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.65 | ||
| EV/EBITDA | 17.08 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- 1CRM has a very decent profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as 1CRM's earnings are expected to grow with 13.91% in the coming years.
PEG (NY)1.18
PEG (5Y)0.71
EPS Next 2Y14%
EPS Next 3Y13.91%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.73%, 1CRM is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.68, 1CRM pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.81, 1CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.73% |
5.2 History
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 21.86% of the earnings are spent on dividend by 1CRM. This is a low number and sustainable payout ratio.
DP21.86%
EPS Next 2Y14%
EPS Next 3Y13.91%
SALESFORCE INC / 1CRM.MI FAQ
What is the ChartMill fundamental rating of SALESFORCE INC (1CRM.MI) stock?
ChartMill assigns a fundamental rating of 6 / 10 to 1CRM.MI.
What is the valuation status for 1CRM stock?
ChartMill assigns a valuation rating of 6 / 10 to SALESFORCE INC (1CRM.MI). This can be considered as Fairly Valued.
How profitable is SALESFORCE INC (1CRM.MI) stock?
SALESFORCE INC (1CRM.MI) has a profitability rating of 7 / 10.
What is the expected EPS growth for SALESFORCE INC (1CRM.MI) stock?
The Earnings per Share (EPS) of SALESFORCE INC (1CRM.MI) is expected to grow by 16.58% in the next year.
How sustainable is the dividend of SALESFORCE INC (1CRM.MI) stock?
The dividend rating of SALESFORCE INC (1CRM.MI) is 3 / 10 and the dividend payout ratio is 21.86%.