SALESFORCE INC (CRM)
US79466L3024 - Common Stock
CRM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 277 industry peers in the Software industry. CRM gets an excellent profitability rating and is at the same time showing great financial health properties. CRM is not overvalued while it is showing excellent growth. This is an interesting combination. This makes CRM very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
CRM had positive earnings in the past year.
CRM had a positive operating cash flow in the past year.
Each year in the past 5 years CRM has been profitable.
In the past 5 years CRM always reported a positive cash flow from operatings.
1.2 Ratios
CRM's Return On Assets of 4.14% is fine compared to the rest of the industry. CRM outperforms 76.36% of its industry peers.
The Return On Equity of CRM (6.93%) is better than 77.09% of its industry peers.
CRM has a better Return On Invested Capital (6.48%) than 82.91% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CRM is significantly below the industry average of 10.18%.
The 3 year average ROIC (3.04%) for CRM is below the current ROIC(6.48%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.14% | ||
| ROE | 6.93% | ||
| ROIC | 6.48% |
ROA(3y)1.96%
ROA(5y)2.45%
ROE(3y)3.26%
ROE(5y)3.99%
ROIC(3y)3.04%
ROIC(5y)2.16%
1.3 Margins
The Profit Margin of CRM (11.87%) is better than 81.82% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
CRM has a Operating Margin of 17.21%. This is amongst the best in the industry. CRM outperforms 87.64% of its industry peers.
In the last couple of years the Operating Margin of CRM has grown nicely.
CRM's Gross Margin of 75.50% is fine compared to the rest of the industry. CRM outperforms 69.45% of its industry peers.
In the last couple of years the Gross Margin of CRM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.21% | ||
| PM (TTM) | 11.87% | ||
| GM | 75.5% |
OM growth 3Y100.32%
OM growth 5Y32.39%
PM growth 3Y-14.76%
PM growth 5Y7.26%
GM growth 3Y0.48%
GM growth 5Y0.4%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CRM is destroying value.
Compared to 1 year ago, CRM has less shares outstanding
The number of shares outstanding for CRM has been increased compared to 5 years ago.
Compared to 1 year ago, CRM has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.87 indicates that CRM is not in any danger for bankruptcy at the moment.
CRM has a Altman-Z score of 4.87. This is in the better half of the industry: CRM outperforms 68.00% of its industry peers.
The Debt to FCF ratio of CRM is 0.99, which is an excellent value as it means it would take CRM, only 0.99 years of fcf income to pay off all of its debts.
CRM has a Debt to FCF ratio of 0.99. This is in the better half of the industry: CRM outperforms 76.00% of its industry peers.
A Debt/Equity ratio of 0.14 indicates that CRM is not too dependend on debt financing.
CRM has a Debt to Equity ratio of 0.14. This is comparable to the rest of the industry: CRM outperforms 46.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.99 | ||
| Altman-Z | 4.87 |
ROIC/WACC0.67
WACC9.7%
2.3 Liquidity
A Current Ratio of 1.09 indicates that CRM should not have too much problems paying its short term obligations.
With a Current ratio value of 1.09, CRM is not doing good in the industry: 72.73% of the companies in the same industry are doing better.
A Quick Ratio of 1.09 indicates that CRM should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.09, CRM is not doing good in the industry: 71.27% of the companies in the same industry are doing better.
CRM does not score too well on the current and quick ratio evaluation. However, as it has 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 | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 56.38%, which is quite impressive.
The Earnings Per Share has been growing by 26.05% on average over the past years. This is a very strong growth
Looking at the last year, CRM shows a quite strong growth in Revenue. The Revenue has grown by 11.18% 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.
EPS 1Y (TTM)56.38%
EPS 3Y18.61%
EPS 5Y26.05%
EPS growth Q2Q36.31%
Revenue 1Y (TTM)11.18%
Revenue growth 3Y17.93%
Revenue growth 5Y21.28%
Revenue growth Q2Q10.77%
3.2 Future
Based on estimates for the next years, CRM will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.53% on average per year.
Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.92% on average per year.
EPS Next Y20.09%
EPS Next 2Y16.35%
EPS Next 3Y17.19%
EPS Next 5Y13.53%
Revenue Next Year9.15%
Revenue Next 2Y9.83%
Revenue Next 3Y10.49%
Revenue Next 5Y9.92%
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.
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
CRM is valuated quite expensively with a Price/Earnings ratio of 34.79.
Compared to the rest of the industry, the Price/Earnings ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 71.27% of the companies listed in the same industry.
CRM is valuated rather expensively when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
CRM is valuated quite expensively with a Price/Forward Earnings ratio of 28.97.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than 67.64% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, CRM is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.79 | ||
| Fwd PE | 28.97 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CRM indicates a somewhat cheap valuation: CRM is cheaper than 79.27% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CRM is valued a bit cheaper than the industry average as 76.36% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.11 | ||
| EV/EBITDA | 26.71 |
4.3 Compensation for Growth
CRM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CRM has an outstanding profitability rating, which may justify a higher PE ratio.
CRM's earnings are expected to grow with 17.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.73
PEG (5Y)1.34
EPS Next 2Y16.35%
EPS Next 3Y17.19%
5. Dividend
5.1 Amount
CRM has a yearly dividend return of 0.56%, which is pretty low.
Compared to an average industry Dividend Yield of 12.33, CRM pays a better dividend. On top of this CRM pays more dividend than 91.64% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, CRM's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.56% |
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
DPN/A
EPS Next 2Y16.35%
EPS Next 3Y17.19%
SALESFORCE INC
NYSE:CRM (5/17/2024, 7:04:00 PM)
After market: 285.42 -0.19 (-0.07%)285.61
+0.93 (+0.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap276.47B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.56% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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PT rev (1m)
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EPS NQ rev (1m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.79 | ||
| Fwd PE | 28.97 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.73
PEG (5Y)1.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.14% | ||
| ROE | 6.93% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.21% | ||
| PM (TTM) | 11.87% | ||
| GM | 75.5% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)56.38%
EPS 3Y18.61%
EPS 5Y
EPS growth Q2Q
EPS Next Y20.09%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.18%
Revenue growth 3Y17.93%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
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