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Salesforce.com: Sales Cloud Defying Gravity

6:50 pm ET, 22 Nov 2017


Salesforce delivered third-quarter results that beat market expectations, as the company continues to deliver strong growth across all product verticals and geographies.  Many of the topics discussed at Salesforce’s annual Dreamforce event earlier this month showed up in these results, including outsize international growth and consistent operating margin expansion. 

The biggest delight is that European revenue rose more than 45% and adjusted operating margin expanded more than 350 basis points.  Third-quarter revenue rose 25% versus the prior-year period to $2.7 billion.   Salesforce continues to be one of the most attractive profitable growth stories in software.  

Salesforce’s oldest product, Sales Cloud, continues to enjoy reaccelerated growth behind innovations such as Einstein-driven artificially intelligent features and new products such as Financial Services and Healthcare Cloud.  Sales Cloud revenue rose 17% versus the prior-year period.  Sales Cloud is a crucial driver of Salesforce’s growth engine, as it often serves as the opening salvo when Salesforce lands net new customers, and frequently yields strong sell-through of Salesforce’s other premier cloud offerings. The longer Sales Cloud can fuel the new customer pipeline, the more durable Salesforce’s profitable growth trajectory will be.  

COO Keith Block echoed this sentiment, intimating that more and more customers are evaluating multiple clouds at once, driving switching costs.

Over the last month, CRM has returned 7.81%. This return is higher than Technology Sector (0.45%), Application Software Industry (2.92%), and S&P 500 (0.85%) returns.


Salesforce.com Inc (CRM) Stock Guide

Updated at: 3:10 pm ET, 17 Sep 2020

Before we start: if you're looking for CRM stock price, you can quickly find it out by visiting Finny and typing "CRM quote". If you're looking for a quick scoop on CRM stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "CRM". You'll get all this info in one place. Or you can just type "CRM news" to get the latest stock news.

Looking to buy or sell Salesforce.com Inc (CRM)? Interested in getting the full scoop on CRM, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this CRM stock guide, we'll address key questions about CRM, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are CRM earnings?
2. What is CRM stock forecast (i.e., prediction)?
3. CRM buy or sell? What is CRM Finny Score?
4. What are the reasons to buy CRM? Why should I buy CRM stock?
5. What are the reasons to sell CRM? Why should I sell CRM stock?
6. What are CRM key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are CRM earnings?

CRM trailing 12-month earnings per share (EPS) is $2.59.

Analyst Predictions

2. What is CRM stock forecast (i.e., prediction)?

Based on CRM analyst price targets, CRM stock forecast is $270.64 (for a year from now). That means the average analyst price target for CRM stock is $270.64. The prediction is based on 45 analyst estimates.

The low price target for CRM is $160.00, while the high price target is $344.00.

CRM analyst rating is Buy.

Analysis

3. CRM buy or sell? What is CRM Finny Score?

#{finnyScore:63}Our quantitative analysis shows 5 reasons to buy and 3 reasons to sell CRM, resulting in Finny Score of 63.

4. What are the reasons to buy CRM? Why should I buy CRM stock?

Here are the reasons to buy CRM stock:

  • Software as a service is among the fastest methods for enterprises to cut costs in the IT infrastructure.
  • Salesforce.com is far and away the largest pure-play SaaS vendor in the world, producing subscriptions revenue several times larger than peers Workday and ServiceNow.
  • The firm has successfully expanded into a number of fast-growing verticals to prop up long-term revenue growth, including marketing, analytics, application development, and the Internet of Things.
  • CRM quarterly revenue growth was 28.90%, higher than the industry and sector average revenue growth (1.11% and 0.89%, respectively). See CRM revenue growth chart.
  • CRM profitability is improving. The YoY profit margin change was 7.14 percentage points. See CRM profitability chart.
  • CRM average analyst rating is Buy. See CRM analyst rating chart.
  • CRM average analyst price target ($270.64) is above its current price ($241.82). See CRM price target chart.
  • CRM cash to debt ratio is 1.50, higher than the average industry (0.16) and sector (0.17) cash to debt ratio. See CRM cash to debt chart.

5. What are the reasons to sell CRM? Why should I sell CRM stock?

Let's look at the reasons to sell CRM stock (i.e., the bear case):

  • There is still some trepidation for some industry verticals in moving applications, data, and sensitive information to the cloud. Salesforce.com does not offer hybrid or on-premises solutions to mitigate these concerns.
  • Microsoft, Oracle, SAP, and others will continue to invest heavily in cloud-based services, which could stunt Salesforce.com’s growth rate.
  • Salesforce.com leverages several third-party data centers, limiting the amount of oversight the firm can have on its infrastructure and representing a potential security vulnerability.
  • CRM Price/Sales ratio is 13.08, which is high compared to its industry peers’ P/S ratios. See CRM forward Price/Sales ratio chart.
  • CRM short interest (days to cover the shorts) ratio is 2.33. The stock garners more short interest than the average industry, sector or S&P 500 stock. See CRM short interest ratio chart.
  • CRM Enterprise Value/Revenue multiple is 12.57, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See CRM Enterprise Value/Revenue chart.

Key Stats

6. What are CRM key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for CRM:

Metrics CRM
Price $241.86
Average Price Target / Upside $273.42 / 13.05%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Software - Application
Sector Technology
Number of Employees 35,000
Market Cap $238.27B
Forward P/E Ratio 69.64
Price/Book Ratio 12.29
Revenue (TTM) $19.38B
YoY Quarterly Revenue Growth 28.90%
Profit Margin 12.21%

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