SALESFORCE INC (CRM) Stock Fundamental Analysis
NYSE:CRM - New York Stock Exchange, Inc. - US79466L3024 - Common Stock - Currency: USD
CRM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. CRM has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. CRM has a correct valuation and a medium growth rate. These ratings would make CRM suitable for quality investing!
1. Profitability
1.1 Basic Checks
CRM had positive earnings in the past year.
In the past year CRM had a positive cash flow from operations.
CRM had positive earnings in each of the past 5 years.
In the past 5 years CRM always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.29%, CRM is in the better half of the industry, outperforming 77.66% of the companies in the same industry.
Looking at the Return On Equity, with a value of 10.23%, CRM is in the better half of the industry, outperforming 78.72% of the companies in the same industry.
CRM has a better Return On Invested Capital (8.87%) than 84.04% of its industry peers.
CRM had an Average Return On Invested Capital over the past 3 years of 5.83%. This is significantly below the industry average of 12.26%.
The 3 year average ROIC (5.83%) for CRM is below the current ROIC(8.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 10.23% | ||
| ROIC | 8.87% |
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
CRM has a better Profit Margin (16.08%) than 82.27% of its industry peers.
In the last couple of years the Profit Margin of CRM has grown nicely.
Looking at the Operating Margin, with a value of 20.50%, CRM belongs to the top of the industry, outperforming 87.59% of the companies in the same industry.
In the last couple of years the Operating Margin of CRM has grown nicely.
Looking at the Gross Margin, with a value of 77.34%, CRM is in the better half of the industry, outperforming 73.40% of the companies in the same industry.
CRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.5% | ||
| PM (TTM) | 16.08% | ||
| GM | 77.34% |
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
CRM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for CRM has been reduced compared to 1 year ago.
CRM has more shares outstanding than it did 5 years ago.
CRM has a better debt/assets ratio than last year.
2.2 Solvency
CRM has an Altman-Z score of 5.05. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
CRM's Altman-Z score of 5.05 is fine compared to the rest of the industry. CRM outperforms 68.44% of its industry peers.
The Debt to FCF ratio of CRM is 0.67, which is an excellent value as it means it would take CRM, only 0.67 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.67, CRM is in the better half of the industry, outperforming 76.60% 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.
CRM has a Debt to Equity ratio of 0.14. This is comparable to the rest of the industry: CRM outperforms 50.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 5.05 |
ROIC/WACC0.82
WACC10.85%
2.3 Liquidity
CRM has a Current Ratio of 1.07. This is a normal value and indicates that CRM is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.07, CRM is doing worse than 71.99% of the companies in the same industry.
A Quick Ratio of 1.07 indicates that CRM should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.07, CRM is doing worse than 70.57% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.29%, which is quite good.
CRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.71% yearly.
The Revenue has been growing slightly by 7.97% in the past year.
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.
EPS 1Y (TTM)15.29%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%5.74%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%7.62%
3.2 Future
The Earnings Per Share is expected to grow by 12.04% on average over the next years. This is quite good.
The Revenue is expected to grow by 9.62% on average over the next years. This is quite good.
EPS Next Y12.13%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
EPS Next 5Y12.04%
Revenue Next Year8.57%
Revenue Next 2Y8.82%
Revenue Next 3Y9.26%
Revenue Next 5Y9.62%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 26.35, CRM can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 74.11% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.45, CRM is valued at the same level.
A Price/Forward Earnings ratio of 21.30 indicates a rather expensive valuation of CRM.
74.82% of the companies in the same industry are more expensive than CRM, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.90. CRM is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.35 | ||
| Fwd PE | 21.3 |
4.2 Price Multiples
81.56% 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 82.27% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.65 | ||
| EV/EBITDA | 21.64 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CRM does not grow enough to justify the current Price/Earnings 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 12.79% in the coming years.
PEG (NY)2.17
PEG (5Y)0.95
EPS Next 2Y11.99%
EPS Next 3Y12.79%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.64%, which is pretty low.
Compared to an average industry Dividend Yield of 16.17, CRM pays a better dividend. On top of this CRM pays more dividend than 91.84% of the companies listed in the same industry.
With a Dividend Yield of 0.64, CRM pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
CRM is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
25.00% of the earnings are spent on dividend by CRM. This is a low number and sustainable payout ratio.
DP25%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
272.15
+2.94 (+1.09%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.85%
Inst Owner Change1.85%
Ins Owners2.52%
Ins Owner Change0.51%
Market Cap261.12B
Analysts79.67
Price Target360.1 (32.32%)
Short Float %1.51%
Short Ratio1.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
Yearly Dividend1.59
Dividend Growth(5Y)N/A
DP25%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.95%
Min EPS beat(2)0.37%
Max EPS beat(2)5.52%
EPS beat(4)3
Avg EPS beat(4)2.78%
Min EPS beat(4)-2.3%
Max EPS beat(4)7.51%
EPS beat(8)7
Avg EPS beat(8)3.13%
EPS beat(12)11
Avg EPS beat(12)6.7%
EPS beat(16)15
Avg EPS beat(16)12.06%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.42%
Max Revenue beat(2)-0.16%
Revenue beat(4)1
Avg Revenue beat(4)-0.4%
Min Revenue beat(4)-1.42%
Max Revenue beat(4)0.02%
Revenue beat(8)1
Avg Revenue beat(8)-0.54%
Revenue beat(12)2
Avg Revenue beat(12)-0.17%
Revenue beat(16)4
Avg Revenue beat(16)-0.11%
PT rev (1m)-3.14%
PT rev (3m)-6.69%
EPS NQ rev (1m)1.7%
EPS NQ rev (3m)1.68%
EPS NY rev (1m)1.49%
EPS NY rev (3m)1.39%
Revenue NQ rev (1m)1.26%
Revenue NQ rev (3m)1.26%
Revenue NY rev (1m)0.93%
Revenue NY rev (3m)0.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.35 | ||
| Fwd PE | 21.3 | ||
| P/S | 6.77 | ||
| P/FCF | 20.65 | ||
| P/OCF | 19.6 | ||
| P/B | 4.3 | ||
| P/tB | 48.79 | ||
| EV/EBITDA | 21.64 |
EPS(TTM)10.33
EY3.8%
EPS(NY)12.78
Fwd EY4.7%
FCF(TTM)13.18
FCFY4.84%
OCF(TTM)13.88
OCFY5.1%
SpS40.22
BVpS63.23
TBVpS5.58
PEG (NY)2.17
PEG (5Y)0.95
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.29% | ||
| ROE | 10.23% | ||
| ROCE | 10.63% | ||
| ROIC | 8.87% | ||
| ROICexc | 11.58% | ||
| ROICexgc | 390.16% | ||
| OM | 20.5% | ||
| PM (TTM) | 16.08% | ||
| GM | 77.34% | ||
| FCFM | 32.77% |
ROA(3y)3.46%
ROA(5y)3.61%
ROE(3y)5.81%
ROE(5y)5.94%
ROIC(3y)5.83%
ROIC(5y)3.79%
ROICexc(3y)7.18%
ROICexc(5y)4.68%
ROICexgc(3y)84.54%
ROICexgc(5y)53.64%
ROCE(3y)6.99%
ROCE(5y)4.55%
ROICexcg growth 3Y144.43%
ROICexcg growth 5Y51.1%
ROICexc growth 3Y136.01%
ROICexc growth 5Y54.45%
OM growth 3Y107.25%
OM growth 5Y49.51%
PM growth 3Y44.23%
PM growth 5Y85.88%
GM growth 3Y1.66%
GM growth 5Y0.52%
F-Score8
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.67 | ||
| Debt/EBITDA | 0.74 | ||
| Cap/Depr | 19.59% | ||
| Cap/Sales | 1.75% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 117.34% | ||
| Profit Quality | 203.82% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 5.05 |
F-Score8
WACC10.85%
ROIC/WACC0.82
Cap/Depr(3y)19.53%
Cap/Depr(5y)21.06%
Cap/Sales(3y)2.13%
Cap/Sales(5y)2.49%
Profit Quality(3y)1155.13%
Profit Quality(5y)786.34%
High Growth Momentum
Growth
EPS 1Y (TTM)15.29%
EPS 3Y28.52%
EPS 5Y27.71%
EPS Q2Q%5.74%
EPS Next Y12.13%
EPS Next 2Y11.99%
EPS Next 3Y12.79%
EPS Next 5Y12.04%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y12.67%
Revenue growth 5Y17.25%
Sales Q2Q%7.62%
Revenue Next Year8.57%
Revenue Next 2Y8.82%
Revenue Next 3Y9.26%
Revenue Next 5Y9.62%
EBIT growth 1Y20.01%
EBIT growth 3Y133.52%
EBIT growth 5Y75.31%
EBIT Next Year35.67%
EBIT Next 3Y18.7%
EBIT Next 5Y15.41%
FCF growth 1Y79.03%
FCF growth 3Y33.02%
FCF growth 5Y27.52%
OCF growth 1Y68.07%
OCF growth 3Y29.7%
OCF growth 5Y24.76%