Salesforce Earns Neutral Rating From AI Models For October
Salesforce.com Inc CRM has been a growing company since its inception in 1999, long before the stay-at-home model rocked the business world.
Now, with millions still working out of home offices at least part-time, their enterprise cloud computing services are more in demand than ever.
Salesforce.com started this year on a rise, then took a tumble over the course of nearly a month when the market crashed between February and March. By mid-April, however, the company’s stock was on a steady rise again – a trend it has continued for much of the proceeding months.
Salesforce’s stock took a sudden leap up between August 25 and 26, when the company’s quarterly report showed that it beat Q2/20 fiscal expectations across the board. Even in the midst of a pandemic, their quarterly revenue grew 29% year-over-year.
While some of these gains are the result of sheer economic necessity for large corporations, Salesforce did take several steps to further their prospects. Chiefly, the company released several of their Work.com tools to the public to assist businesses in returning to life as the new normal.
Their good fortunes arguably peaked this year when Salesforce.com was added to the Dow Jones Industrial Average at the end of August. The company joined Amgen AMGN and Honeywell International HON in replacing Exxon Mobil XOM , Pfizer PFE , and Raytheon. This move cemented the company’s place among the “big guys” such as Microsoft MSFT and Adobe ADBE .
What Does This Mean for Salesforce Stock?
That’s where Q.ai’s deep learning algorithms come into play. We do the deep digging into a company’s financials so that you don’t have to. Now, we’re ready to share what the data says for the month of October.
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Salesforce.com, Inc (CRM) By the Numbers
Salesforce.com, Inc bumped up 0.38% on Tuesday, closing the day at $255.97 on volume of 2.9 million shares. The company’s stock has wobbled some this month, as shown by Tuesday’s middling the 10- and 22-day price averages of $260.92 and $253.03, respectively.
However, a few small bumps haven’t slowed Salesforce’s gains by much – their stock is still trading up over 53% YTD.
The company has experienced some great gains in their revenue as well. The last fiscal year saw gains over 13.3%, while the past three have seen a whopping increase of almost 84%. This has brought their revenue from $10.5 billion to nearly $17.1 billion.
Salesforce’s operating income has seen less impressive gains overall – but still, gains nonetheless – from $454 million to $503 million in the last three years.
However, the company’s EPS has experienced unusual growth that may give some investors pause. Although Salesforce has seen a marked 428% increase in the last three fiscal years, and a whopping 1,627% increase in the last fiscal year alone, their EPS only sits at $0.15.
And, in the same time frame, their ROE has dropped from 4% to a paltry 0.5% in the last year.
Currently, Salesforce is expecting a forward 12-month revenue increase of 7.8%, and they are trading with a forward 12-month P/E of 76.75.
So, What’s the Verdict?
Salesforce is a large and growing company that has experienced tremendous growth on the back of the pandemic. At first glance, their prospects seem solid.
However, when our AI took a deeper look at the company, it found that Salesforce is an average investment at best. The company earned its highest rating, an A, in Growth, following by a B in Quality Value, a C in Technicals, and a D in Low Volatility Momentum.
Unfortunately for Salesforce, this means that the best rating our AI could muster is a Neutral rating for the month of October. Invest at your own risk.
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