SALESFORCE INC (CRM)
US79466L3024 - Common Stock
We assign a fundamental rating of 7 out of 10 to CRM. CRM was compared to 279 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 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.
CRM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.11%, CRM is in the better half of the industry, outperforming 79.21% of the companies in the same industry.
CRM has a better Return On Equity (9.77%) than 79.21% of its industry peers.
CRM's Return On Invested Capital of 7.71% is amongst the best of the industry. CRM outperforms 82.44% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CRM is significantly below the industry average of 11.54%.
The 3 year average ROIC (3.04%) for CRM is below the current ROIC(7.71%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.11% | ||
| ROE | 9.77% | ||
| ROIC | 7.71% |
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 (15.44%) is better than 83.15% of its industry peers.
In the last couple of years the Profit Margin of CRM has grown nicely.
The Operating Margin of CRM (19.06%) is better than 87.46% of its industry peers.
CRM's Operating Margin has improved in the last couple of years.
CRM has a Gross Margin of 76.35%. This is in the better half of the industry: CRM outperforms 70.61% of its industry peers.
CRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.06% | ||
| PM (TTM) | 15.44% | ||
| GM | 76.35% |
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
CRM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for CRM has been reduced compared to a year ago.
2.2 Solvency
CRM has an Altman-Z score of 6.27. This indicates that CRM is financially healthy and has little risk of bankruptcy at the moment.
CRM's Altman-Z score of 6.27 is fine compared to the rest of the industry. CRM outperforms 69.18% of its industry peers.
The Debt to FCF ratio of CRM is 0.74, which is an excellent value as it means it would take CRM, only 0.74 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CRM (0.74) is better than 76.34% of its industry peers.
A Debt/Equity ratio of 0.15 indicates that CRM is not too dependend on debt financing.
CRM has a Debt to Equity ratio of 0.15. This is comparable to the rest of the industry: CRM outperforms 44.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 0.74 | ||
| Altman-Z | 6.27 |
ROIC/WACC0.66
WACC11.76%
2.3 Liquidity
A Current Ratio of 1.04 indicates that CRM should not have too much problems paying its short term obligations.
CRM's Current ratio of 1.04 is on the low side compared to the rest of the industry. CRM is outperformed by 74.91% of its industry peers.
A Quick Ratio of 1.04 indicates that CRM should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.04, CRM is not doing good in the industry: 74.55% of the companies in the same industry are doing better.
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 | 1.04 | ||
| Quick Ratio | 1.04 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 36.43% over the past year.
Measured over the past years, CRM shows a very strong growth in Earnings Per Share. The EPS has been growing by 26.05% on average per year.
CRM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.26%.
The Revenue has been growing by 21.28% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)36.43%
EPS 3Y18.61%
EPS 5Y26.05%
EPS Q2Q%20.75%
Revenue 1Y (TTM)10.26%
Revenue growth 3Y17.93%
Revenue growth 5Y21.28%
Sales Q2Q%8.39%
3.2 Future
The Earnings Per Share is expected to grow by 14.63% on average over the next years. This is quite good.
The Revenue is expected to grow by 10.16% on average over the next years. This is quite good.
EPS Next Y24.33%
EPS Next 2Y17.03%
EPS Next 3Y15.93%
EPS Next 5Y14.63%
Revenue Next Year8.81%
Revenue Next 2Y8.89%
Revenue Next 3Y9.12%
Revenue Next 5Y10.16%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 35.72 indicates a quite expensive valuation of CRM.
Based on the Price/Earnings ratio, CRM is valued a bit cheaper than the industry average as 70.25% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.96, CRM is valued a bit more expensive.
CRM is valuated quite expensively with a Price/Forward Earnings ratio of 29.86.
CRM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CRM is cheaper than 68.82% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of CRM to the average of the S&P500 Index (23.82), we can say CRM is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.72 | ||
| Fwd PE | 29.86 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CRM is valued a bit cheaper than the industry average as 75.27% of the companies are valued more expensively.
CRM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CRM is cheaper than 78.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.01 | ||
| EV/EBITDA | 28.64 |
4.3 Compensation for Growth
CRM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of CRM may justify a higher PE ratio.
CRM's earnings are expected to grow with 15.93% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.47
PEG (5Y)1.37
EPS Next 2Y17.03%
EPS Next 3Y15.93%
5. Dividend
5.1 Amount
With a yearly dividend of 0.48%, CRM is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 11.80, CRM pays a better dividend. On top of this CRM pays more dividend than 91.04% of the companies listed in the same industry.
With a Dividend Yield of 0.48, CRM pays less dividend than the S&P500 average, which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
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 2Y17.03%
EPS Next 3Y15.93%
SALESFORCE INC
NYSE:CRM (11/21/2024, 8:21:01 PM)
After market: 335.99 +0.21 (+0.06%)335.78
+10.08 (+3.09%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
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Market Cap321.01B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.72 | ||
| Fwd PE | 29.86 | ||
| P/S | |||
| P/FCF | |||
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| P/B | |||
| P/tB | |||
| EV/EBITDA |
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PEG (NY)1.47
PEG (5Y)1.37
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.11% | ||
| ROE | 9.77% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.06% | ||
| PM (TTM) | 15.44% | ||
| GM | 76.35% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
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F-Score
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.04 | ||
| Quick Ratio | 1.04 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
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Cap/Depr(5y)
Cap/Sales(3y)
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Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)36.43%
EPS 3Y18.61%
EPS 5Y
EPS Q2Q%
EPS Next Y24.33%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.26%
Revenue growth 3Y17.93%
Revenue growth 5Y
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