Salesforce.com Inc

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CRM : NYSE : Technology
$94.94 | %
Today's Range: 94.555 - 95.35
Avg. Daily Volume: 3916500.0
09/22/17 - 4:00 PM ET

Financial Analysis


SALESFORCE.COM INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. SALESFORCE.COM INC has weak liquidity. Currently, the Quick Ratio is 0.68 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 38.09% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)2561.592036.62
EBITDA ($mil)242.67196.77
EBIT ($mil)50.4247.41
Net Income ($mil)17.74229.62


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)3501.251174.28
Total Assets ($mil)17418.814381.31
Total Debt ($mil)2165.152018.1
Equity ($mil)8468.546132.58


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin80.1280.36
EBITDA Margin9.479.66
Operating Margin1.972.33
Sales Turnover0.540.52
Return on Assets-0.461.51
Return on Equity-0.943.55
Debt Q2 FY17 Q2 FY16
Current Ratio0.770.61
Debt/Capital0.20.25
Interest Expense21.6320.71
Interest Coverage2.332.29


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)718.7685.0
Div / share0.00.0
EPS0.020.33
Book value / share11.788.95
Institutional Own % n/a n/a
Avg Daily Volume4027030.04583319.0

Valuation


HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. For additional comparison, its price-to-book ratio of 8.09 indicates a significant premium versus the S&P 500 average of 3.10 and a discount versus the industry average of 9.45. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. The valuation analysis reveals that, SALESFORCE.COM INC seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CRM NM Peers 39.51   CRM 28.64 Peers 33.27

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

CRM's P/E is negative making this valuation measure meaningless.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CRM is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CRM 56.39 Peers 35.26   CRM NA Peers 1.17

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

CRM is trading at a significant premium to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CRM 8.09 Peers 9.45   CRM -135.48 Peers 42.80

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CRM is trading at a discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CRM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CRM 7.30 Peers 7.05   CRM 25.59 Peers 12.14

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CRM is trading at a valuation on par with its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

CRM has a sales growth rate that significantly exceeds its peers.

 

 

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