Salesforce.com Inc

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CRM : NYSE : Technology
$76.03 | %
Today's Range: 75.4325 - 76.12
Avg. Daily Volume: 6157600.0
01/20/17 - 4:01 PM ET

Financial Analysis


SALESFORCE.COM INC's gross profit margin for the third quarter of its fiscal year 2016 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 0.50 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 43.28% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)2144.781711.97
EBITDA ($mil)171.66176.87
EBIT ($mil)2.4642.67
Net Income ($mil)-37.31-25.16


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1200.811358.01
Total Assets ($mil)14387.6710911.97
Total Debt ($mil)2025.151494.04
Equity ($mil)6806.044749.95


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin79.2581.94
EBITDA Margin8.010.33
Operating Margin0.112.49
Sales Turnover0.550.58
Return on Assets1.42-0.8
Return on Equity3.02-1.84
Debt Q3 FY16 Q3 FY15
Current Ratio0.60.74
Debt/Capital0.230.24
Interest Expense21.9518.25
Interest Coverage0.112.34


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)696.7664.0
Div / share0.00.0
EPS-0.05-0.04
Book value / share9.777.15
Institutional Own % n/a n/a
Avg Daily Volume6159957.07601984.0

Valuation


HOLD. SALESFORCE.COM INC's P/E ratio indicates a significant premium compared to an average of 50.24 for the Software industry and a significant premium compared to the S&P 500 average of 25.41. For additional comparison, its price-to-book ratio of 7.74 indicates a significant premium versus the S&P 500 average of 2.83 and a discount versus the industry average of 7.80. The price-to-sales ratio is well above both the S&P 500 average and 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 251.90 Peers 50.24   CRM 27.41 Peers 22.83

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 59.04 Peers 52.11   CRM NM Peers 0.79

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 7.74 Peers 7.80   CRM 330.76 Peers 22.26

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 6.66 Peers 5.86   CRM 25.46 Peers 5.85

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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