Salesforce.com Inc

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CRM : NYSE : Technology
$71.62 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 5,256,900
09/28/16 - 4:01 PM ET

Financial Analysis


SALESFORCE.COM INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. SALESFORCE.COM INC has very weak liquidity. Currently, the Quick Ratio is 0.47 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 35.20% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)2036.621634.68
EBITDA ($mil)196.51152.32
EBIT ($mil)47.4118.52
Net Income ($mil)229.62-0.85


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1174.281170.47
Total Assets ($mil)14381.3110793.98
Total Debt ($mil)2018.11446.7
Equity ($mil)6132.584535.8


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin80.3582.14
EBITDA Margin9.649.31
Operating Margin2.331.13
Sales Turnover0.520.55
Return on Assets1.51-0.93
Return on Equity3.55-2.23
Debt Q2 FY16 Q2 FY15
Current Ratio0.610.71
Debt/Capital0.250.24
Interest Expense20.7118.1
Interest Coverage2.291.02


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)685.0660.0
Div / share0.00.0
EPS0.330.0
Book value / share8.956.87
Institutional Own % n/a n/a
Avg Daily Volume4794607.03590674.0

Valuation


HOLD. SALESFORCE.COM INC's P/E ratio indicates a significant premium compared to an average of 62.28 for the Software industry and a significant premium compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 8.33 indicates a significant premium versus the S&P 500 average of 2.82 and a premium versus the industry average of 7.58. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, SALESFORCE.COM INC proves to trade 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 240.61 Peers 62.28   CRM 27.27 Peers 24.12

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

CRM is trading at a significant premium to its peers.

 

Premium. 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 premium 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 58.27 Peers 32.90   CRM NM Peers 0.86

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.

CRM's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CRM 8.33 Peers 7.58   CRM 306.66 Peers 35.16

Average. 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 valuation on par with its peers.

 

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

CRM is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CRM 6.84 Peers 5.85   CRM 25.11 Peers 4.71

Premium. 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 premium to 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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