Benzinga - by Benzinga Insights, Benzinga Staff Writer.
In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Salesforce (NYSE:CRM) in relation to its major competitors in the Software industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in the industry.
Salesforce Background Salesforce Inc provides enterprise cloud computing solutions. The company offers customer relationship management technology that brings companies and customers together. Its Customer 360 platform helps the group to deliver a single source of truth, connecting customer data across systems, apps, and devices to help companies sell, service, market, and conduct commerce. It also offers Service Cloud for customer support, Marketing Cloud for digital marketing campaigns, Commerce Cloud as an e-commerce engine, the Salesforce Platform, which allows enterprises to build applications, and other solutions, such as MuleSoft for data integration.
| Salesforce Inc | 64.25 | 4.39 | 7.62 | 2.46% | $2.75 | $7.14 | 10.77% |
| SAP SE | 87.86 | 4.81 | 6.59 | -1.92% | $-0.42 | $5.76 | 8.06% |
| Adobe Inc | 45.71 | 13.87 | 11 | 3.88% | $1.21 | $4.59 | 11.32% |
| Intuit Inc | 55.47 | 8.95 | 10.77 | 13.4% | $3.34 | $5.67 | 11.95% |
| Synopsys Inc | 64.17 | 12.60 | 14.49 | 4.23% | $0.41 | $1.15 | 15.2% |
| Cadence Design Systems Inc | 77.17 | 22.60 | 19.83 | 7.1% | $0.36 | $0.88 | -1.23% |
| Workday Inc | 38.37 | 7 | 7.61 | 1.32% | $0.14 | $1.5 | 3.52% |
| Roper Technologies Inc | 39.15 | 3.21 | 8.98 | 2.17% | $0.73 | $1.18 | 14.36% |
| Palantir Technologies Inc | 175.42 | 12.42 | 21.14 | 2.91% | $0.09 | $0.52 | 20.78% |
| Autodesk Inc | 50.22 | 24.27 | 8.27 | 16.9% | $0.35 | $1.34 | 3.89% |
| Datadog Inc | 359.35 | 18.56 | 19.45 | 2.02% | $0.06 | $0.5 | 26.89% |
| Ansys Inc | 65.88 | 5.29 | 12.89 | 5.29% | $0.09 | $0.4 | 15.99% |
| AppLovin Corp | 50.14 | 36.03 | 8.18 | 23.28% | $0.45 | $0.76 | 47.9% |
| PTC Inc | 75.15 | 7.31 | 9.62 | 3.98% | $0.21 | $0.49 | 11.23% |
| Tyler Technologies Inc | 108.65 | 6.73 | 10.32 | 1.82% | $0.11 | $0.22 | 8.58% |
| Zoom Video Communications Inc | 22.90 | 2.31 | 4.23 | 2.65% | $0.23 | $0.87 | 3.25% |
| Bentley Systems Inc | 48.81 | 16.97 | 14.03 | 7.74% | $0.12 | $0.28 | 7.43% |
| Manhattan Associates Inc | 73.79 | 58.02 | 14.67 | 20.78% | $0.06 | $0.14 | 15.18% |
| Dynatrace Inc | 88.56 | 6.79 | 9.63 | 1.93% | $0.04 | $0.31 | 21.11% |
| Average | 84.82 | 14.87 | 11.76 | 6.64% | $0.42 | $1.48 | 13.63% |
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.dividend-frequency { font-size: 12px; color: #6c757d; } When conducting a detailed analysis of Salesforce, the following trends become clear:
- A Price to Earnings ratio of 64.25 significantly below the industry average by 0.76x suggests undervaluation. This can make the stock appealing for those seeking growth.
- Considering a Price to Book ratio of 4.39, which is well below the industry average by 0.3x, the stock may be undervalued based on its book value compared to its peers.
- Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 7.62, which is 0.65x the industry average.
- The Return on Equity (ROE) of 2.46% is 4.18% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
- The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.75 Billion, which is 6.55x above the industry average, implying stronger profitability and robust cash flow generation.
- The gross profit of $7.14 Billion is 4.82x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company is witnessing a substantial decline in revenue growth, with a rate of 10.77% compared to the industry average of 13.63%, which indicates a challenging sales environment.
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When examining Salesforce in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
- Salesforce demonstrates a stronger financial position compared to its top 4 peers in the sector.
- With a lower debt-to-equity ratio of 0.21, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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