In the latest trading session, Salesforce.com (CRM) closed at $203.33, marking a +0.75% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 5.74%.
Prior to today's trading, shares of the customer-management software developer had gained 3.68% over the past month. This has lagged the Computer and Technology sector's gain of 3.72% and outpaced the S&P 500's gain of 0.85% in that time.
Investors will be hoping for strength from Salesforce.com as it approaches its next earnings release, which is expected to be May 31, 2023. On that day, Salesforce.com is projected to report earnings of $1.61 per share, which would represent year-over-year growth of 64.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.17 billion, up 10.24% from the year-ago period.
CRM's full-year Zacks Consensus Estimates are calling for earnings of $7.11 per share and revenue of $34.62 billion. These results would represent year-over-year changes of +35.69% and +10.43%, respectively.
Investors might also notice recent changes to analyst estimates for Salesforce.com. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.01% lower within the past month. Salesforce.com is currently a Zacks Rank #3 (Hold).
Investors should also note Salesforce.com's current valuation metrics, including its Forward P/E ratio of 28.39. For comparison, its industry has an average Forward P/E of 25.16, which means Salesforce.com is trading at a premium to the group.
Also, we should mention that CRM has a PEG ratio of 1.69. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer - Software stocks are, on average, holding a PEG ratio of 2.06 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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