Dig through the CRM stocks for yourself and you are likely to find a couple that shines particularly bright. Below, we provide a look at two of the industry’s elite in Salesforce.com (CRM) and Pegasystems (PEGA).
CRM, the industry trailblazer in on-demand software for customer relationship management, has been in business since the late 90s. Based in the tech haven of San Francisco, CRM’s software really does empower organizations to manage essential operations that much more efficiently. In fact, CRM is the top CRM provider in the entire world. Gartner reports CRM’s market share is currently hovering around the 20% mark. The next closest competitor is SAP with a market share of less than 10%.
CRM has a forward P/E ratio of 63.19. This high ratio is a sign CRM might be overvalued at $239 and change per share. The stock’s 52-week high is $284.50. CRM has a 52-week low of $184.38.
CRM has a B POWR Rating grade. The stock has B grades in the Quality and Sentiment components of the POWR Ratings. The stock has Cs in the Value and Momentum components. You can find out how CRM fares in the Growth and Stability components of the POWR Ratings by clicking here.
Of the 131 publicly traded companies in the Software – Application space, CRM is ranked 24th. Investors who are interested in learning more about the stocks that comprise this sector can do so by clicking here.
The top analysts insist CRM has considerable upside potential, setting an average target price of $278.66. If CRM reaches this price, it will have popped by more than 14%. Across the prior 13 months, the average analyst price target for the stock has increased nearly $82. Of the 47 analysts to have issued CRM recommendations, 14 consider it a Strong Buy, 23 consider it a Buy, and 10 consider it a Hold.
PEGA, a global trailblazer in the CRM field, specializes in CRM software that empowers organizations to manage extensive customer interactions. PEGA’s software makes it easier for businesses to provide the best possible customer service across a litany of channels. PEGA customers are in myriad industries including healthcare management, insurance, telecommunications, and financial services.
PEGA’s current price point of $134.60 is concerning as the stock has a forward P/E ratio of 482.43. This is an absurdly high ratio. However, PEGA qualifies as a tech stock so plenty of investors will overlook the potential overvaluation and hop on board. PEGA has a beta of 1.20, meaning it is unlikely to significantly undulate should the market get rocky. The stock is currently trading about $14 below its 52-week high of $148.80. PEGA’s 52-week low is $100.69.
PEGA has a C rating meaning it is a Hold. The stock has a B Sentiment grade yet it has Cs in POWR Ratings components such as Stability, Quality, and Momentum. You can find out how PEGA fares in the rest of the POWR Ratings grades such as Value and Growth by clicking here.
PEGA is ranked 24th out of 59 stocks in its Software – Business category. You can find out more about the stocks in this space by clicking here.
The top analysts have established an average price target of $162.33 for PEGA. This means PEGA has 22% upside potential. The stock’s highest target price is $180. The lowest analyst target price for PEGA is $162.33.
Which is the Better Buy?
CRM is the better buy as it has a superior POWR Rating. There is the potential for PEGA to ascend from its C POWR Rating to a B or A rating in due time yet the stock is not worth investing in at the current moment. Roll with CRM and you will sleep soundly at night.
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CRM shares were trading at $241.96 per share on Wednesday morning, up $1.85 (+0.77%). Year-to-date, CRM has gained 8.73%, versus a 16.77% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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