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 284 industry peers in the Software industry. Both the health and profitability get an excellent rating, making CRM a very profitable company, without any liquidiy or solvency issues. CRM is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make CRM suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year CRM was profitable.
In the past year CRM had a positive cash flow from operations.
In the past 5 years CRM has always 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 6.49% is amongst the best of the industry. CRM outperforms 80.80% of its industry peers.
The Return On Equity of CRM (10.14%) is better than 78.99% of its industry peers.
CRM has a Return On Invested Capital of 8.05%. This is amongst the best in the industry. CRM outperforms 82.25% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CRM is significantly below the industry average of 11.91%.
The 3 year average ROIC (3.04%) for CRM is below the current ROIC(8.05%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | 10.14% | ||
| ROIC | 8.05% |
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
CRM has a Profit Margin of 15.96%. This is amongst the best in the industry. CRM outperforms 81.88% of its industry peers.
CRM's Profit Margin has improved in the last couple of years.
CRM has a Operating Margin of 19.75%. This is amongst the best in the industry. CRM outperforms 86.96% of its industry peers.
CRM's Operating Margin has improved in the last couple of years.
CRM's Gross Margin of 76.94% is fine compared to the rest of the industry. CRM outperforms 71.74% of its industry peers.
CRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.75% | ||
| PM (TTM) | 15.96% | ||
| GM | 76.94% |
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.
CRM has less shares outstanding than it did 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
An Altman-Z score of 6.49 indicates that CRM is not in any danger for bankruptcy at the moment.
The Altman-Z score of CRM (6.49) is better than 72.46% of its industry peers.
The Debt to FCF ratio of CRM is 0.71, which is an excellent value as it means it would take CRM, only 0.71 years of fcf income to pay off all of its debts.
CRM has a better Debt to FCF ratio (0.71) than 73.91% of its industry peers.
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 (0.14) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.71 | ||
| Altman-Z | 6.49 |
ROIC/WACC0.58
WACC13.9%
2.3 Liquidity
CRM has a Current Ratio of 1.11. This is a normal value and indicates that CRM is financially healthy and should not expect problems in meeting its short term obligations.
CRM's Current ratio of 1.11 is on the low side compared to the rest of the industry. CRM is outperformed by 71.74% of its industry peers.
A Quick Ratio of 1.11 indicates that CRM should not have too much problems paying its short term obligations.
CRM has a worse Quick ratio (1.11) than 70.65% of its industry peers.
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 | 1.11 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
CRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.63%, 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
The Revenue has grown by 9.53% in the past year. This is quite good.
The Revenue has been growing by 21.28% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)27.63%
EPS 3Y18.61%
EPS 5Y26.05%
EPS Q2Q%14.22%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y17.93%
Revenue growth 5Y21.28%
Sales Q2Q%8.3%
3.2 Future
The Earnings Per Share is expected to grow by 13.88% on average over the next years. This is quite good.
Based on estimates for the next years, CRM will show a quite strong growth in Revenue. The Revenue will grow by 9.33% on average per year.
EPS Next Y23.38%
EPS Next 2Y17.24%
EPS Next 3Y16%
EPS Next 5Y13.88%
Revenue Next Year9.04%
Revenue Next 2Y9.05%
Revenue Next 3Y9.21%
Revenue Next 5Y9.33%
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.
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
The Price/Earnings ratio is 31.94, which means the current valuation is very expensive for CRM.
Based on the Price/Earnings ratio, CRM is valued a bit cheaper than the industry average as 68.48% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 29.63. CRM is around the same levels.
With a Price/Forward Earnings ratio of 27.45, CRM can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, CRM is valued a bit cheaper than the industry average as 70.29% of the companies are valued more expensively.
CRM is valuated rather expensively when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.94 | ||
| Fwd PE | 27.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRM is valued a bit cheaper than the industry average as 78.26% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CRM is valued a bit cheaper than 77.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.97 | ||
| EV/EBITDA | 27.13 |
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.
A more expensive valuation may be justified as CRM's earnings are expected to grow with 16.00% in the coming years.
PEG (NY)1.37
PEG (5Y)1.23
EPS Next 2Y17.24%
EPS Next 3Y16%
5. Dividend
5.1 Amount
With a yearly dividend of 0.49%, CRM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 12.71, CRM pays a better dividend. On top of this CRM pays more dividend than 89.86% of the companies listed in the same industry.
With a Dividend Yield of 0.49, CRM pays less dividend than the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
5.2 History
CRM does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y17.24%
EPS Next 3Y16%
309.8
-8.63 (-2.71%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners83.35%
Inst Owner Change1.61%
Ins Owners2.57%
Ins Owner Change-1.94%
Market Cap296.48B
Analysts78.93
Price Target406.8 (31.31%)
Short Float %1.05%
Short Ratio1.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.61%
Min EPS beat(2)-2.3%
Max EPS beat(2)7.51%
EPS beat(4)3
Avg EPS beat(4)1.77%
Min EPS beat(4)-2.3%
Max EPS beat(4)7.51%
EPS beat(8)7
Avg EPS beat(8)5.64%
EPS beat(12)11
Avg EPS beat(12)7.56%
EPS beat(16)15
Avg EPS beat(16)16.26%
Revenue beat(2)1
Avg Revenue beat(2)0%
Min Revenue beat(2)-0.02%
Max Revenue beat(2)0.02%
Revenue beat(4)1
Avg Revenue beat(4)-0.43%
Min Revenue beat(4)-1.45%
Max Revenue beat(4)0.02%
Revenue beat(8)2
Avg Revenue beat(8)0.12%
Revenue beat(12)3
Avg Revenue beat(12)-0.07%
Revenue beat(16)6
Avg Revenue beat(16)0.1%
PT rev (1m)-0.59%
PT rev (3m)27.32%
EPS NQ rev (1m)-1.51%
EPS NQ rev (3m)-2.25%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.77%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)0.07%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.94 | ||
| Fwd PE | 27.45 | ||
| P/S | 7.97 | ||
| P/FCF | 24.97 | ||
| P/OCF | 23.67 | ||
| P/B | 5.07 | ||
| P/tB | 55.8 | ||
| EV/EBITDA | 27.13 |
EPS(TTM)9.7
EY3.13%
EPS(NY)11.28
Fwd EY3.64%
FCF(TTM)12.41
FCFY4.01%
OCF(TTM)13.09
OCFY4.22%
SpS38.86
BVpS61.15
TBVpS5.55
PEG (NY)1.37
PEG (5Y)1.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.49% | ||
| ROE | 10.14% | ||
| ROCE | 10.2% | ||
| ROIC | 8.05% | ||
| ROICexc | 9.79% | ||
| ROICexgc | 95.87% | ||
| OM | 19.75% | ||
| PM (TTM) | 15.96% | ||
| GM | 76.94% | ||
| FCFM | 31.93% |
ROA(3y)1.96%
ROA(5y)2.45%
ROE(3y)3.26%
ROE(5y)3.99%
ROIC(3y)3.04%
ROIC(5y)2.16%
ROICexc(3y)3.74%
ROICexc(5y)2.67%
ROICexgc(3y)43.92%
ROICexgc(5y)30.47%
ROCE(3y)3.85%
ROCE(5y)2.73%
ROICexcg growth 3Y151.79%
ROICexcg growth 5Y-14.84%
ROICexc growth 3Y101.5%
ROICexc growth 5Y22.33%
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%
F-Score9
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.71 | ||
| Debt/EBITDA | 0.77 | ||
| Cap/Depr | 18.32% | ||
| Cap/Sales | 1.75% | ||
| Interest Coverage | 31.11 | ||
| Cash Conversion | 114.95% | ||
| Profit Quality | 200.07% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 6.49 |
F-Score9
WACC13.9%
ROIC/WACC0.58
Cap/Depr(3y)20.47%
Cap/Depr(5y)23.29%
Cap/Sales(3y)2.45%
Cap/Sales(5y)2.89%
Profit Quality(3y)1210.2%
Profit Quality(5y)1331.61%
High Growth Momentum
Growth
EPS 1Y (TTM)27.63%
EPS 3Y18.61%
EPS 5Y26.05%
EPS Q2Q%14.22%
EPS Next Y23.38%
EPS Next 2Y17.24%
EPS Next 3Y16%
EPS Next 5Y13.88%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y17.93%
Revenue growth 5Y21.28%
Sales Q2Q%8.3%
Revenue Next Year9.04%
Revenue Next 2Y9.05%
Revenue Next 3Y9.21%
Revenue Next 5Y9.33%
EBIT growth 1Y36.26%
EBIT growth 3Y136.24%
EBIT growth 5Y60.57%
EBIT Next Year50.08%
EBIT Next 3Y20.58%
EBIT Next 5Y12.47%
FCF growth 1Y113.64%
FCF growth 3Y32.41%
FCF growth 5Y27.64%
OCF growth 1Y98.65%
OCF growth 3Y28.7%
OCF growth 5Y24.67%