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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Salesforce, Inc. (XNYS:CRM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CRM
Name:
SALESFORCE, INC. (XNYS:CRM)
Sector:
3.06B
Industry:
Software�Application
CEO:
Mr. Marc Benioff
Total Employees:
73,541
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -103.03% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SALESFORCE, INC.(CRM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
153.69
One Month Price Target:
$154.66
Six Month Price Target :
$159.5
Likely Price in One Year's Time:
Ticker:
$165.32
Likely Trading Range Today Under (Normal Volatility)
$153.03
Price Upper limit ($) :
$154.46
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$145.09
This week:
$134.46
This month :
$115.23
Other Primary facts
Market Cap:
151.75B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.00B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
26.04%
-15.89%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$193.61
$175.34
$113.77
$132.04
Medium risk (<10%) entry points
Buy Call
Sell Call
$169.40
Buy Put:
Sell Put:
$165.50
$137.93
$141.88
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CRM
Sharpe Ratio:
0.94%
Comparison:
CRM, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -2.61% lower than the industry
& is -58.81% lower than the market/S&P 500 average
Average Returns/Yield of
CRM
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.69%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is -16.47% below industry average
Classification:
CRM, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.74
Statistical test of Returns:
CRM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.74%
Weekly Volatility:
6.13%
Monthly Volatility:
12.26%
Yearly Volatility:
42.47%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.09%
Volatility in last five trading days has been -60.12% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.60%
Weekly VaR:
-12.51%
Monthly VaR:
-25.03%
How Much Can the price of
CRM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-86.69%
This translates to price declining to:
$120.28
This translates to price declining to:
$20.45
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CRM is a 76.63% riskier investment compared to the market/S&P 500 & is 51.32% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -23.73% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CRM
Beta in relation to market/S&P 500--1.13
Expected beta in 1 year's time:
1.024
Expected beta in 3 year's time:
1.448
Unlevered (debt free) Beta:
1
Beta in relation to Nasdaq (XNAS):
1.129
Beta in relation to all global stocks::
0.794
Beta Comparison & Analysis
Beta of competitors/peers::
1.136
Beta is -0.91% lower than peers
Average Industry Beta:
1.335
Beta is -15.71% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
3.54%
Sustainable growth rate is -88.63% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.026
Alpha is 8.44% above industry average alpha yield
Alpha is -163% below the market average
Analysis of Cost of Capital of
CRM
Equity cost of capital:
0.109
Equity cost of capital is -11.69% below industry mean WACC
Unlevered (without debt) cost of capital:
9.65%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$27.94
Revenue growth rate per share of (3Y):
3.61
Annual revenue growth rate is -50.62% below industry average
EPS:
$1.03
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$5.67
-
-
Debt per share
$5.41
EBITDA per share
$4.53
Valuation Analysis Today of
CRM
P/E Ratio:
287.27
P/E Ratio of Competitors/Peers:
95.9
P/E ratio is 199.55% higher than main peers & is 61.75% higher than the industry
Stock price/value with industry average P/E ratio: $182.93
CRM is -15.98% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
5.5
Price to sales ratio is -52.05% below the industry mean
P/B (Price to book value ratio):
3.61
Price to free cash flow: 27.12
Price to free cash flow ratio is -62.63% lower than the industry
Net income growth rate (3Y):
2415.03%
Net income growth rate is 889.06% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
12.70%
Net debt to equity ratio:
-5.67%
Debt to assets ratio:
8.33%
Net debt to assets ratio:
-3.72%
Debt-to-asset ratio is -84.81% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
7.04%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.10%
Analysis of Key Statistics
Correlation of price movement with the market:
0.681
Statistical significance of correlation:
CRM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is 35.35% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.023
Covariance of price movement with the market:
-0.036
Kurtosis
14.204
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.882
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
CRM
Gross Profit Margin Ratio:
293%
Operating Profit Margin Ratio:
0.77%
Operating profit margin is -104.00% lower than the industry
Net Profit Margin Ratio:
293%
Effective Tax Rate:
1.11%
Effective tax rate is -95.78% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
2.36%
Return on equity (ROE) is -118.02% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.55%
Return on assets (ROA) is -140.25% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.33
Current ratio is -55.46% below industry average
Cash Conversion Cycle (days):
134.2
Cash conversion cycle is 41.59% above industry average
The remaining useful life of property plant & equipment is: 9.6 years
Stock based compensation to net income ratio:
56.23%
In-depth Efficiency Analysis
Revenue generated per employee:
379.9K
Each employee generates 10% more revenue than industry average revenue per employee
EBITDA generated per employee:
61.6K
Each employee generates 473% more EBITDA than industry average revenue per employee
Profit generated per employee:
13.6K
Each employee generates -178% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
41.6K
Each employee generates -635% less free cash flow than industry average revenue per employee
Assets/Capital per employee
604.3K
Each employee generates -635% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 30.08%
Growth rate in R&D investment/expenditure is 1867.42% higher than the industry
Competitors/Peer firms of
CRM
ORACLE CORPORATION (XNYS:ORCL)
ACCENTURE PUBLIC LIMITED COMPANY (XNYS:ACN)
SAP SE (XNYS:SAP)
SHOPIFY INC. (XNYS:SHOP)
INTERNATIONAL BUSINESS MACHINES CORPORATION (XNYS:IBM)
SERVICENOW, INC. (XNYS:NOW)
INFOSYS LIMITED (XNYS:INFY)
SNOWFLAKE INC. (XNYS:SNOW)
UBER TECHNOLOGIES, INC. (XNYS:UBER)
Current Analyst Ratings
Strong buy�67%
Buy�104%
Hold�13%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
27.94B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
7.52B
20.42B
4.83B
2.70B
15.38B
12.68B
-
20.21B
-
-
3.52B
4.53B
214.00M
1.00B
899.00M
10.00M
1.00B
Statement of Cash Flow
Date:
Period:
685.00M
Differed Income Tax :
-
Stock Based Compensation :
564.00M
Change in Working Capital :
1.48B
Accounts Receivables:
4.62B
Other Working Capital:
- 1806000.00K
Other Non-Cash Items:
26.00M
Net Cash Provided by Operating Activities:
3.23B
Investments in PP&E:
-
Net Acquisitions:
- 425000.00K
Purchases of Investments:
- 2086000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
8.54B
6.48B
15.02B
3.17B
-
2.25B
20.44B
5.56B
26.64B
3.93B
3.94B
2.64B
1.74B
44.44B
-
64.89B
3.44B
726.00M
-
11.16B
-
15.32B
5.41B
1.59B
7.00B
-
22.32B
1.00M
6.40B
- 68000.0K
36.23B
April 30, 2021 at 6:00:00 AM
27.73B
42.57B
64.89B
10.42B
6.13B
- 2412000.0K
1.64B
- 171000.00K
- 1047000.00K
- 60000.00K
-
-
-
225.00M
165.00M
3.00M
2.35B
8.54B
6.20B
3.23B
- 171000.00K
3.06B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CRM
2023
2024
2025
2026
2027
$201.99
$217.27
$233.71
$251.39
$270.40