Sign InSalesforce, Inc. (CRM) Shows Strong Growth and Potential: Fundamental and Technical Analysis
Summary
Fundamental and technical analysis suggest that Salesforce, Inc. (CRM) is a compelling investment opportunity, with a predicted uptick in stock price due to strong earnings results, positive outlook, and high target forecasts, potentially reaching around $217-$219 by the end of the upcoming week.
Fundamental Analysis
Salesforce, Inc. (CRM), a renowned player in the enterprise software space traded at $215.04 as of its last close on August 30, 2023. This trajectory marks an appreciable increase of 1.45% from the previous trading session. Acquisition of a heightened volume of approximately 9.50 million shares shows that the stock is high in demand, surpassing the average volume of around 6.25 million. CRM’s year-high and year-low are $238.22 and $126.34, respectively, signaling a significant spread in trading ranges across the year. As of the current analysis, the market cap stands at a robust $209.45 billion.
The RSI14 at 60 suggests that the stock is neither in overbought nor in oversold territory, implying an efficiently balanced trading scenario. The 50-day moving average ($215.82) crosses marginally over the last trading price ($215.04), which could potentially induce a bearish sentiment. However, its price is comfortably higher than the 200-day moving average ($184.78), indicating a long-term bullish trend.
From an earnings perspective, the EPS stands at $0.38, but stands stark against a high PE of 565.89, highlighting the investors' anticipation of better future earnings. Following their recent earnings announcement on August 30, 2023, the corporation's Q2 2023 earnings call transcript highlighted a successful beat in quarterly earnings. They reported earnings of $2.12 per share, higher than the estimated $1.90, marking a significant improvement from $1.19 the previous year.
Technical Analysis
CRM's recent supporting levels were robust, showcasing a daily low of $209.43. On the other hand, it exhibited resistance at $216.97, suggesting potential resistance as CRM approaches new highs. The stock's Average True Range (ATR) stands at 2.29, pointing out the stock's volatility has been reasonably high. MACD for a 3-month period stands at -7.33, indicating a bearish market sentiment in the short-run.
Among 32 analysts covering Salesforce, 2 rate it a strong buy, 19 recommend a buy, with 11 leans towards hold, demonstrating an overall consensus of a "Buy". Targets forecast a high of $360, a low of $119 – a wide variant – with a consensus at $226.65 and a median at $225. The DCF, a measure of intrinsic value, comes out at $222.08, which is moderately higher than the most recent closing price, implying some undervaluation.
Prediction and Final Evaluation
Based on the aforementioned analysis, and notwithstanding the high PE ratio, CRM is predicted to see an uptick in the stock price for the next trading day due to the strong earnings results and positive outlook from the Q2 2023 earnings call. The stock price may reach around $217 - $219 by the end of the upcoming week, attributing to the analyst consensus and high target forecasts.
Given the constructive earnings, solid market cap, analysts' confidence, and the strong market position, Salesforce, Inc., in an operational perspective, makes a compelling case for investment. The high PE is a point of concern, but the company's recent earnings beat and positive future perspectives should help mitigate that. Hence, considering all the fundamental and technical factors, Salesforce, Inc. (CRM) can be categorized as a 'Buy.' However, such decision should be made with a thorough understanding of the inherent risks and market conditions.
