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Trade-Ideas: Salesforce.com (CRM) Is Today's Pre-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Salesforce.com (CRM) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Salesforce.com as such a stock due to the following factors:

  • CRM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $163.4 million.
  • CRM traded 28,000 shares today in the pre-market hours as of 8:50 AM.
  • CRM is down 2.1% today from yesterday's close.

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More details on CRM:

salesforce.com, inc. provides enterprise cloud computing solutions to various businesses and industries worldwide. Currently there are 24 analysts that rate Salesforce.com a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Salesforce.com has been 6.0 million shares per day over the past 30 days. Salesforce.com has a market cap of $25.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.11 and a short float of 86.5% with 15.08 days to cover. Shares are up 3.2% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Salesforce.com as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.8%. Since the same quarter one year prior, revenues rose by 28.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $283.19 million or 32.82% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.09%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 247.7% when compared to the same quarter one year ago, falling from -$19.48 million to -$67.72 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, SALESFORCE.COM INC's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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