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Salesforce.com (CRM) closed the most recent trading day at $159.65, moving +1.73% from the previous trading session. This change outpaced the S&P 500's 0.95% gain on the day. Meanwhile, the Dow gained 0.6%, and the Nasdaq, a tech-heavy index, added 0.04%.
Prior to today's trading, shares of the customer-management software developer had lost 7.73% over the past month. This has was narrower than the Computer and Technology sector's loss of 9.71% and lagged the S&P 500's loss of 7.49% in that time.
Wall Street will be looking for positivity from Salesforce.com as it approaches its next earnings report date. This is expected to be May 31, 2022. In that report, analysts expect Salesforce.com to post earnings of $0.93 per share. This would mark a year-over-year decline of 23.14%. Meanwhile, our latest consensus estimate is calling for revenue of $7.37 billion, up 23.61% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.63 per share and revenue of $31.57 billion, which would represent changes of -3.14% and +19.18%, respectively, from the prior year.
Any recent changes to analyst estimates for Salesforce.com should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.83% lower within the past month. Salesforce.com is currently a Zacks Rank #4 (Sell).
In terms of valuation, Salesforce.com is currently trading at a Forward P/E ratio of 33.87. Its industry sports an average Forward P/E of 27.85, so we one might conclude that Salesforce.com is trading at a premium comparatively.
Also, we should mention that CRM has a PEG ratio of 2.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CRM's industry had an average PEG ratio of 2.13 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 150, putting it in the bottom 41% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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