Why the Market Dipped But Salesforce (CRM) Gained Today

Salesforce (CRM) closed at $192.98 in the latest trading session, marking a +1.04% move from the prior day. This change outpaced the S&P 500's 0.17% loss on the day. On the other hand, the Dow registered a gain of 0.49%, and the technology-centric Nasdaq decreased by 0.83%.

Shares of the customer-management software developer have appreciated by 12.66% over the course of the past month, outperforming the Computer and Technology sector's gain of 3.01%, and the S&P 500's gain of 3.52%.

Investors will be eagerly watching for the performance of Salesforce in its upcoming earnings disclosure. On that day, Salesforce is projected to report earnings of $3.27 per share, which would represent year-over-year growth of 12.37%. In the meantime, our current consensus estimate forecasts the revenue to be $11.3 billion, indicating a 10.44% growth compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $14.16 per share and a revenue of $46.09 billion, indicating changes of +13.1% and +14.31%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Salesforce. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.24% decrease. At present, Salesforce boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Salesforce currently has a Forward P/E ratio of 13.49. This represents a discount compared to its industry average Forward P/E of 21.72.

One should further note that CRM currently holds a PEG ratio of 0.75. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.2.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 108, this industry ranks in the top 44% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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