1 Software Stock With Major Growth Potential to Buy Now

NYSE: CRM | Salesforce.com Inc News, Ratings, and Charts

CRM – Software company Salesforce (CRM) has set ambitious long-term financial targets. The company’s historical and projected growth make the stock a solid buy now. Read on….

Salesforce, Inc. (CRM) is a customer relationship management technology provider. The company’s Customer 360 platform enables its customers to work together to deliver connected experiences.

For the fourth quarter, the company expects its revenue to come between $7.93 and $8.03 billion and non-GAAP EPS between $1.35 and $1.37. For the full year (fiscal 2023), the company estimates a revenue between $30.9 and $31 billion and non-GAAP EPS between $4.92 and $4.94.

Earlier, the company announced a new long-range profitability goal, which underscored CRM’s commitment to efficient operations. It aims for a 25% adjusted operating margin, including future acquisitions, for the 2026 fiscal year. Moreover, Amy Weaver, CRM’s finance chief, reiterated the $50 billion revenue target for fiscal 2026.

However, the stock is down 49.1% year-to-date and 15.6% over the past month. On the other hand, it has gained marginally over the past five days to close the last trading session at $129.44.

Here are the factors that could influence CRM’s performance in the near term:

Solid Financials

For the fiscal third quarter that ended October 31, CRM’s total revenues increased 14.2% year-over-year to $7.84 billion. Non-GAAP income from operations rose 30.9% from the prior-year quarter to $1.78 billion. Non-GAAP net income and non-GAAP net income per share came in at $1.40 billion and $1.40, up 9.8% and 10.2% year-over-year, respectively.

Strong Historical Growth

CRM’s revenue has grown at a 24.1% CAGR over the past three years and a 24.9% CAGR over the past five years. Its EBITDA has grown at a 1.7% CAGR over the past three years. Its total assets and levered FCF have grown at 22.5% and 21.8% CAGRs over the same period.

Favorable Analysts Expectations

The consensus EPS estimates of $1.36 for the current quarter (ending January 2023) and $1.27 for the next quarter (ending April 2023) indicate 61.9% and 29.6% year-over-year improvements, respectively. The consensus revenue estimates of $8 billion and $8.08 billion for the same quarters reflect increases of 9.2% and 9.1% from the respective prior-year periods.

Street EPS and revenue estimates for the current year (fiscal 2023) of $4.93 and $30.97 billion reflect a rise of 3.1% and 16.9% from the prior year, respectively. EPS is expected to grow by 15.4% per annum over the next five years.

Wall Street Analysts See Significant Upside Potential

Of the 35 Wall Street analysts rating CRM in the last three months, 27 have rated it Buy, and eight have rated it Hold. The 12-month median price target of $197.20 indicates a 52.4% potential upside. The price targets range from a low of $150 to a high of $300.

POWR Ratings Reflect Promising Prospects

CRM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. CRM has an A grade for Growth, in sync with its solid financial growth. The stock has a Sentiment grade of B, consistent with favorable analyst estimates.

In the 137-stock Software – Application industry, it is ranked #15.

Click here to see the additional POWR Ratings for CRM (Value, Momentum, Stability, and Quality).

View all the top stocks in the Software – Application industry here.

Bottom Line

CRM’s long-term financial targets might reassure investors about its growth prospects. Moreover, the company has a solid growth record. On top of it, CRM’s bottom line growth in the third quarter is promising. With Wall Street analysts bullish on the stock, CRM might be an ideal buy now.

How Does Salesforce, Inc. (CRM) Stack up Against Its Peers?

While CRM has an overall POWR Rating of B, one might consider looking at its industry peers, Commvault Systems, Inc. (CVLT) and eGain Corporation (EGAN), which have an overall A (Strong Buy) rating.


CRM shares fell $1.06 (-0.82%) in premarket trading Tuesday. Year-to-date, CRM has declined -49.25%, versus a -17.79% rise in the benchmark S&P 500 index during the same period.


About the Author: Anushka Dutta


Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
CRMGet RatingGet RatingGet Rating
CVLTGet RatingGet RatingGet Rating
EGANGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Is It Time for Small Caps to Shine?

November was about as good of a month as a stock investor could ask for. However, still too much of the gains are accruing the same old collection of large cap stocks at the top of the S&P 500 (SPY). Gladly there are healthy signs that small caps are ready to take charge. Get Steve Reitmeister’s take on that subject including a preview of his top 11 picks for today’s market. Read on for more…

3 Big Reasons Why Microsoft May Not Be A Buy After All

Cheap puts and an expensive stock set up for a put play in Microsoft (MSFT).

This Stock is Feasting on Success During the Holidays

There are a lot of traditions that surround the holidays…tree decorating, giving gifts, holiday lights, festive menorahs. But one tradition stands out above the rest when it comes to getting together with family and friends and celebrating this time of year. And that is going to a holiday party and feasting on all of the holiday delights. If your holiday party finds you celebrating in a restaurant this year, you can probably thank Sysco Corp for delivering, and possibly having a hand in preparing, the food and drink you’re enjoying.

Top 3 Industrial Stocks Lighting Up the Market This Month

With legislative support, increased construction investments, and technological advancements, the industrial sector is witnessing rapid growth. Hence, it could be wise to invest in Siemens (SIEGY), Installed Building Products (IBP), and Konica Minolta (KNCAY), all of which are making significant market impacts this month. Keep reading…

Upside Potential for This Bull Market?

The S&P 500 (SPY) is flirting with new highs once again. Thus a good time to ponder the upside potential for stocks into year end and then what is likely on tap in 2024. That is exactly what investment veteran Steve Reitmeister shares in the commentary below including a preview of his 11 favorite picks for today’s market. Read on below for more...

Read More Stories

More Salesforce.com Inc (CRM) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All CRM News