Is Salesforce Inc. (CRM) Stock Cheap Or Risky?


As of Wednesday close, Salesforce Inc.’s (NYSE:CRM) stock was up $2.99, moving up 2.00 percent to $152.24. The average number of shares traded per day over the past five days has been 7,101,240 shares. 3 times new highs have been achieved over the past 5 days, with a -$2.88 fall in that time frame. In the last twenty days, the average volume was 7,093,045, while in the previous 50 days, it was 7,215,516.

Since last month, CRM stock retreated -7.88%. Shares of the company fell to $136.04 on 11/04/22, the lowest level in the past month. A 52-week high of $299.27 was reached on 01/04/22 after having rallying from a 52-week low of $136.04. Since the beginning of this year, CRM’s stock price has dropped by -40.09% or -$101.89, and marked a new high 2 times. However, the stock has declined by -49.13% since its 52-week high.

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CRM stock investors should be aware that Salesforce Inc. (CRM) stock had its last reported insider trading activity 4 days ago on Nov 21. Harris Parker, the Co-Founder and CTO of the company, disposed of 47,095 shares for $144.88 on Nov 21. It resulted in a $6,823,201 divestment by the insider. Harris Parker sold 47,096 shares at an average price of $147.78 on Nov 18. The insider now owns 95,155 shares following the transaction. On Nov 17, Co-Founder and CTO Harris Parker sold 47,096 shares at $149.83 apiece. The transaction was valued at $7,056,308.

Valuation Metrics

Right now, Salesforce Inc. (CRM) has a P/E ratio of about 284.56. The stock’s beta is 1.12. Besides these, the trailing price-to-sales (P/S) ratio of 5.25, the price-to-book (PB) ratio of 2.53, and the price-to-cash flow ratio of 27.10 may also be considered.

Financial Health

In the three months ended July 30, Salesforce Inc.’s quick ratio stood at 1.10, while its current ratio was 1.10, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending July 30 was 0.16, and the total debt-to-equity ratio was 0.18. On the profitability front, the trailing twelve-month gross margin is 72.60% percent. In the year ended July 30, operating margins totaled 0.00%. Based on annual data, CRM earned $19.47 billion in gross profit and brought in $26.49 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 0.60%. Return on equity (ROE) for the past 12 months was 0.90%.

In Salesforce Inc.’s quarter-end financial report for July 30, it reported total debt of $9.42 billion against cash and short-term investments of $6.6 billion. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. CRM’s revenue rose 17.88% to $7.41 billion during the quarter, while net income inched up to $7.72 billion. While analysts expected Salesforce Inc. to report $1.02 quarterly earnings, the actual figure was $1.19 per share, beating the consensus estimate by 16.70%. During the quarter, the company generated $1.51 billion in EBITDA. The liabilities of Salesforce Inc. were 34.05 billion at the end of its most recent quarter ended July 30, and its total debt was $14.32 billion. The value of shareholders’ equity is $1000.0 million.

Technical Picture

This quick technical analysis looks at Salesforce Inc.’s (CRM) price momentum. With a historical volatility rate of 39.42%, the RSI 9-day stood at 50.72% on 23 November.

With respect to its five-day moving average, the current Salesforce Inc. price is down by -1.86% percent or -$2.88. At present, CRM shares trade -4.80% below its 20-day simple moving average and -11.59% percent below its 100-day simple moving average. However, the stock is currently trading approximately -5.02% below its SMA50 and -29.98% below its SMA200.

Stochastic coefficient K was 43.62% and Stochastic coefficient D was 40.37%, while ATR was 6.46. Given the Stochastic reading of 55.46% for the 14-day period, the RSI (14) reading has been calculated as 49.85%. As of today, the MACD Oscillator reading stands at -4.29, while the 14-day reading stands at -1.75.

Analyst Ratings

Salesforce Inc. downgraded its rating on Salesforce Inc. (NYSE: CRM) to a Neutral in a note to investors on November 17, 2022. The analysts firm previously had a Buy rating on the stock.


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