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.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


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


Investor Alert: Mission Accomplished?

The S&P 500 (SPY) has broken out above the 200 day moving average. Does that mean that bear market fears are now over? And should investors be riding the bull to new heights? Read on for Steve Reitmeister’s answer...

Stock Market Update: It’s Complicated!

The S&P 500 (SPY) may have bounced 17% from recent lows, but the outlook for stocks from here is...in a word...COMPLICATED. Read on to get Steve Reitmeister full market outlook and trading plan for this complicated market environment.

Becoming More Bullish on Stocks, But...

Stocks are on a roll with the S&P 500 (SPY) up more than 10% from the recent lows. Before you start getting too giddy, you should read this updated market outlook and trading plan Steve Reitmeister.

Stock Market Held Hostage

Uncertainty is the term most often applied to this stock market. Uncertainty over tariffs. Uncertainty of whether the S&P 500 (SPY) will fall into bear territory. Uncertainty over what happens next. Steve Reitmeister dives into the uncertainty to make sense of the market in this week’s commentary...

Stock Market Standing on the 50 Yard Line

Steve Reitmeister contemplates where the stock market stands now and what happens next in trying to stay on the right side of the market action. One path points to bear and one to new highs for the S&P 500 (SPY). Which will it be?

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