Latest news with #Trefis
Forbes
2 days ago
- Business
- Forbes
What's Happening With CRM Stock?
CHONGQING, CHINA - MAY 25: In this photo illustration, the logo of Salesforce, Inc. is displayed on ... More a smartphone screen, with the latest stock market chart of the company in the background, reflecting investor sentiment and recent trading activity, on May 25, 2025, in Chongqing, China. (Photo Illustration by) Salesforce (NYSE:CRM) has recently published its Q1 fiscal 2026 results (with the fiscal year concluding in January), announcing sales of $9.83 billion and earnings per share of $2.58. Both figures exceeded consensus projections of $9.75 billion and $2.53, respectively. Furthermore, Salesforce has recently disclosed its acquisition of Informatica for $8 billion, marking the company's largest acquisition since Slack ($27 billion) in 2021. In addition, Salesforce has raised its full-year forecast to $11.27-$11.33 in adjusted earnings per share and $41.0 billion-$41.3 billion in revenue, surpassing Street expectations of $11.16 earnings per share and $40.82 billion in revenue. CRM stock has experienced -17% returns since the start of the year (up to May 28), underperforming the S&P 500 index, which is up 1%. If you are seeking an upside with a steadier performance than an individual stock, consider the High Quality portfolio, which has outperformed the S&P and achieved >91% returns since its inception. Upon analyzing its recent performance, a critical question arises: Is CRM stock a buy at $280? We affirmatively respond yes, believing its current valuation is appealing. This conclusion is drawn from a comparison of CRM stock's current valuation with its operational performance in recent years, in addition to its current and past financial health. Our comprehensive analysis of Salesforce, across key indicators like Growth, Profitability, Financial Stability, and Downturn Resilience, reveals that the company continues to demonstrate very strong operational performance and a robust financial condition. We will elaborate on these findings below. Moreover, if you prefer an upside with reduced volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Evaluating what you pay per dollar of sales or profit, CRM stock appears reasonable relative to the broader market. Salesforce's Revenues have experienced significant growth in recent years. Salesforce's profit margins are approximately at the median level for companies within the Trefis coverage universe. Salesforce's balance sheet appears robust. CRM stock has experienced more severe impacts than the benchmark S&P 500 index during certain recent downturns. Concerned about the effects of a market crash on CRM stock? Our dashboard – How Low Can Salesforce Stock Go In A Market Crash? – provides a detailed examination of how the stock fared during and after previous market crashes. In conclusion, Salesforce's performance across the described parameters are as follows: In summary, Salesforce stock performs admirably across the metrics highlighted. Its appealing valuation further supports that it's a wise investment at the current price. At $280, CRM is trading at 7 times its trailing revenues, which is lower than its three-year average price-to-sales (P/S) ratio of 9x. Nonetheless, investors should certainly be mindful of the inherent risks. For instance, the stock's nearly 60% sharp drop during the most recent economic downturn signifies that CRM is susceptible to challenging market conditions. While there appears to be potential for upside in CRM stock, the Trefis Reinforced Value (RV) Portfolio has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) delivering strong returns to investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks allowed a flexible approach to maximize gains during positive market conditions while minimizing losses during downturns, as outlined in RV Portfolio performance metrics. While CRM might have some capacity for growth, it is worthwhile to observe how Salesforce's Peers perform on critical metrics. Additional valuable comparisons for companies across various sectors can be found at Peer Comparisons.
Forbes
2 days ago
- Business
- Forbes
Is SHW Stock Trading Too High?"
PINOLE, CALIFORNIA - OCTOBER 22: A sign is posted in front of a Sherwin-Williams paint store on ... More October 22, 2024 in Pinole, California. (Photo by) Sherwin-Williams Co (NYSE: SHW) stock has increased by 18% over the past year, outperforming the S&P 500, which has risen nearly 12%. This increase prompts an important question for investors: Is SHW stock currently overpriced, and could it face a notable decline, possibly by 20-25% or even 30% down to $250? Well, here's the issue – at approximately $359 per share, SHW stock seems costly. It's trading at almost 28 times its free cash flow from the last twelve months. To provide some context, this equates to a modest cash flow yield of about 3.6%. In comparison, Nvidia, a front-runner in the AI industry with over 80% average revenue growth in recent years, trades at a multiple of 50 times cash flow. In contrast, Sherwin-Williams' revenue growth has been significantly lower, around 5% over the last three years, and an insignificant 0.2% in the past twelve months, making it challenging to justify such a high multiple. The price you pay is important. We have developed the Trefis High-Quality Portfolio to focus on relative valuation. Notably, HQ has achieved over 91% return since its inception and has outperformed the S&P, Nasdaq, and Dow — all of them. Sherwin-Williams' current valuation is based on its record consolidated net sales of $23.10 billion reported for 2024, spurred by growth in the Paint Stores Group. Diluted net income per share increased by 14.1% to $10.55, and adjusted EBITDA rose by 6.0% to $4.49 billion. The company also produced strong cash flow, with $3.15 billion in net operating cash, and returned $2.46 billion to shareholders through dividends and share repurchases. See Buy or Fear SHW stock. Moreover, Sherwin-Williams has consistently expanded its retail presence, opening new stores to capture a larger share of the market. This expansion, along with effective pricing strategies, has bolstered sales and margins in key sectors. The company has undertaken cost-saving measures, including supply chain optimization and productivity improvements, leading to enhanced margins. These initiatives have allowed Sherwin-Williams to manage market difficulties effectively. While Sherwin-Williams has experienced a healthy level of operational profitability historically, the company has recently projected lower-than-anticipated annual profits, raising concerns about short-term growth. SHW has noted weak demand in significant end markets such as housing, automotive, and aerospace. As a result, SHW should be valued more comparably to other companies achieving 5% revenue growth. That is, if it can even maintain that growth. Additionally, there is the challenge of raw material price fluctuations. The production of paints and coatings heavily depends on raw materials like titanium dioxide and petrochemical derivatives. Increases in these prices can squeeze margins. SHW may not always have the ability to pass on higher costs to consumers, particularly in competitive markets. SHW is the largest paint and coatings company in the U.S., holding a leading position in North America's professional paint sector. It operates over 5,000 company-owned stores, affording it unparalleled control over distribution and pricing. Even in cyclical downturns, long-term demand for housing, renovations, and urban development supports SHW's growth. Furthermore, the aging housing stock in the U.S. generates a constant need for repainting and maintenance. Investing in a single stock inherently involves risks. Conversely, the Trefis High Quality (HQ) Portfolio, which comprises 30 stocks, has consistently outperformed the S&P 500 over the last four-year period. Why is that? As a collection, HQ Portfolio stocks have yielded better returns with lower risk compared to the benchmark index, resulting in a less volatile experience as demonstrated in HQ Portfolio performance metrics.
Forbes
2 days ago
- Business
- Forbes
Should You Buy or Sell CRWD Stock Ahead of Its Earnings?
CrowdStrike (NASDAQ:CRWD) is set to announce its earnings on Tuesday, June 3, 2025. For traders focusing on events, grasping the stock's historical behavior around earnings announcements can provide valuable insights. Over the last five years, CrowdStrike's shares have exhibited a pattern of positive one-day returns following earnings announcements in 55% of cases. The median positive return on these days was 9.3%, with the highest single-day gain reaching 13.6%. While the actual outcomes relative to consensus and expectations will significantly impact the stock's trajectory, historical trends can give traders an advantage. Traders may contemplate two primary strategies: Analysts expect CrowdStrike to report earnings of $0.66 per share on revenue of $1.11 billion. This compares to the same quarter last year, when the company disclosed earnings of $0.93 per share on revenue of $921 million. From a fundamental standpoint, CrowdStrike currently holds a market capitalization of $117 billion. Over the previous twelve months, the company realized $4.0 billion in revenue. Nonetheless, it reported operational losses, with -$120 million in operating losses and a net income of -$19 million. That being said, if you're looking for upside with reduced volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative—having surpassed the S&P 500 and yielding returns greater than 91% since its launch. Also, see – GE Stock To $150? View earnings reaction history of all stocks Here are some insights regarding one-day (1D) post-earnings returns: Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns post-earnings is compiled along with the statistics in the table below. CRWD 1D, 5D, and 21D Post-Earnings Return Trefis A relatively less risky strategy (although it may not be effective if the correlation is low) is to analyze the correlation between short-term and medium-term returns post-earnings, identify a pair that demonstrates the highest correlation, and make the necessary trade. For instance, if 1D and 5D show the strongest correlation, a trader can take a "long" position for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and subsequent 5D returns. Sometimes, the performance of peers can impact post-earnings stock reaction. In fact, the pricing-in may commence even before the earnings are revealed. Below is some historical data regarding the past post-earnings performance of CrowdStrike stock in comparison with the stock performance of peers that reported earnings shortly before CrowdStrike. For a fair comparison, peer stock returns also reflect post-earnings one-day (1D) returns. CRWD Correlation With Peer Earnings Trefis Discover more about Trefis RV strategy, which has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000), yielding strong returns for investors. Additionally, if you desire upside with a smoother experience than an individual stock like CrowdStrike, consider the High Quality portfolio, which has outperformed the S&P, achieving >91% returns since its inception.
Forbes
3 days ago
- Business
- Forbes
A 1,000% Profit Opportunity With The S&P 500?
Just weeks ago, we highlighted how a reasonably probable options trade on the S&P 500 ETF (SPY) could have yielded a staggering 3,000% return - read You Missed A 3,000% Profit Opportunity On The S&P 500 - Be Prepared For The Next One. That opportunity has passed, but the market's recent surge and looming uncertainties suggest that another significant move may be on the horizon. And here is your chance to go long on volatility, and potentially set yourself up for a 1000% profit opportunity. The S&P 500 has climbed above $590, buoyed by optimism over potential tax reforms and a temporary delay in European tariffs. However, this tranquility may be short-lived. There is likely turbulence ahead. We aren't telling you the direction - all we are saying is that market volatility may increase, and you could take advantage of that by buying a straddle (call and put options both). While these are short-term opportunities that emerge from time to time, real wealth is created by compounding money over the long-term. That's exactly what the Trefis High Quality (HQ) Portfolio is designed for, and has returned >91% since inception, outperforming S&P 500, Dow, and Nasdaq, all of them. Several factors could disrupt the current market calm: You go 'long on volatility' - something not a lot of investors think about. When a shake-up like this happens, volatility spikes. Option prices go up. Therein lies your opportunity with limited risk. SPY put for 5% out of the money strike ($561) expiring 1 month out (27th June) is currently trading at premium of $3.84. For the full contract (100 shares), that becomes $384. Now, if the S&P 500 were to fall sharply over the next 2-3 weeks, not only will the put price gain because of index decline, it will also gain because of the increase in implied volatility - a key ingredient in pricing options. And that means that a 10% down move - to around $530, will be sufficient to 10x the put prices - a 1000% gain opportunity. And let us remind you, SPY hit a bottom of $482 just last month so a retracement to $530 is not out of reach. And if you think the market can explode on the upside too, then hedge your put purchase with 5% out of the money call that's currently trading at an even lower premium of $1.22. Clearly, the market is more fearful about the downside. You could also buy near term options if you think the shake up could happen sooner - that may have an even higher payoff because the premiums will be lower. Remember, the trade can go wrong. The market may stay range bound, or may move but not enough. If that happens, option prices may not move much, or even decay. But here is the thing: you will be entering a defined-risk trade that has the potential to pay off big if things go your way. So the smart thing to do is to limit the contract size to a point where you are comfortable with the risk. And risk = premiums you pay for buying puts, or puts and calls both if you go for a straddle. While the previous 3,000% opportunity has passed, the current market environment presents new possibilities. By staying informed and considering volatility-focused strategies, investors can position themselves to capitalize on potential market shifts. But here's the thing: Short-term volatilities in the market are not uncommon and are often challenging to navigate. However, long-term outperformance is hopefully what matters to you. If so, consider investing in the Trefis High Quality (HQ) Portfolio, which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics
Forbes
4 days ago
- Business
- Forbes
GE Stock To $150?
CHONGQING, CHINA - APRIL 20: In this photo illustration, the GE Aerospace logo is displayed on a ... More smartphone screen, with the company's stock market performance and candlestick chart visible in the background, showcasing GE Aerospace's real-time financial movements, market valuation, and its role within the global aviation, defense, and aerospace technology sectors, on April 20, 2025, in Chongqing, China. (Photo illustration by) GE Aerospace (NYSE:GE) stock has risen by almost 40% this year, significantly surpassing the S&P 500, which has decreased by 1%. This remarkable surge prompts an important question for investors: Is GE stock now overvalued, and could it face a significant correction, possibly by 25-30% or even 40% to below $150? Well, here's the concern – at roughly $235 per share, GE stock seems overpriced. It is trading at nearly 60 times its free cash flow over the last twelve months. To put this into perspective, this results in a meager cash flow yield of about 1.7%. For comparison, Nvidia, a leader in the AI sector with over 80% average revenue growth in recent years, trades at a lower multiple of 50 times cash flow. GE's revenue growth, at about 9%, while better than 5% in recent years, is insufficient to rationalize such a lofty multiple. The price you pay is crucial. We have created the Trefis High-Quality Portfolio with a focus on relative valuation. Importantly, HQ has achieved a >91% return since its inception and has outperformed the S&P, Nasdaq, and Dow — all of them. Also, see – What Sparked UNH Stock Crash? GE's current valuation arises from a significant restructuring that has redirected the company towards high-growth sectors in commercial, military, and general aviation. After spinning off its healthcare, renewable energy, and power divisions, GE Aerospace is now benefiting from an increasing demand for its aftermarket services, including engine servicing and aircraft maintenance. This trend is projected to persist, supported by solid order inflows—$12.3 billion in Q1'25, showing a 12% year-over-year increase—and an extensive backlog of $140 billion as of Q1. Additionally, GE has shown substantial expansion in margins. Its operating margin has surged from 12.3% in 2022 to 18.8% over the last twelve months, a remarkable 53% increase that the market has rewarded. GE Aerospace also enjoys a leading position in the large commercial engine market, facing only a few competitors such as Rolls-Royce, Safran, Honeywell, and Pratt & Whitney. Its CFM56 and LEAP engines power a considerable portion of the world's commercial fleet, effectively binding airlines into decades of GE's high-margin maintenance, parts, and service operations. Changing engine suppliers is a complex and expensive task for airlines, reinforcing GE's revenue stream. While GE's revenue growth may remain in double digits, the rapid rate of margin expansion is probably not sustainable. Therefore, GE should be valued more in alignment with other companies achieving 10-15% revenue growth. Even when contrasted with a firm like Microsoft, which trades at about a 48 times free cash flow multiple and boasts 15% annual growth, GE's current valuation appears stretched. At Microsoft's multiple of 48x cash flow, GE's stock price would be closer to $190 per share. Investors should reflect on whether GE deserves an even lower multiple considering its growth trajectory. Despite the apprehensions surrounding its high valuation, there are reasons GE Aerospace might continue to perform favorably. Its performance is intrinsically linked to aviation volumes, spanning commercial air travel, domestic flights, international routes, and cargo transport. A strengthening economy, potentially driven by alleviating trade tensions and declining inflation, could significantly enhance business and leisure travel as well as global trade. Increased flight activity directly correlates to a heightened demand for new aircraft and engines, allowing airlines to expand their fleets and replace aging planes. Crucially, more flight hours also mean increased demand for engine maintenance, parts replacement, and service revenue—GE's most lucrative segment. Every additional hour an engine is operational contributes directly to GE's aftermarket revenue, as airlines heighten utilization rates and flight frequencies. Comparing GE with firms like Nvidia and Microsoft is not about identifying direct equivalents but understanding the relative appeal and risk-reward dynamics of an investment. When evaluating GE, investors should consider its potential returns against alternatives such as holding cash (earning interest) or investing in a broad market ETF like the S&P 500. Utilizing 'anchor' assets like Nvidia and Microsoft, which also trade at elevated multiples, offers critical insight into GE's risk-reward profile. These comparisons assist investors in determining whether the anticipated return on GE stock justifies the associated downside risk, especially considering that these anchor stocks provide more compelling growth stories. This analytical method is vital for making informed investment choices. Regardless of the trade-off, investing in a single stock carries risks. Conversely, the Trefis High Quality (HQ) Portfolio, featuring a selection of 30 stocks, has a proven track record of reliably outperforming the S&P 500 over the previous four years. What contributes to this? Collectively, HQ Portfolio stocks have achieved superior returns with reduced risk compared to the standard index, demonstrated in HQ Portfolio performance metrics.
