FAST Graphs on $CRM (Nov 5, 2026)
CRM grew at 29%, so its fair-value P/E equals its growth rate — 29.88, not 15, because it is a fast grower. After many years of high valuation, its fair value has fallen and the price has dropped back to a P/E equal to growth, 17 times earnings, where it now trades.
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Now, let's look at a really fast-growing company like CRM. In this case, we have a company that grew at a rate of 29%. I will remove the normal price-to-earnings ratio line from this chart.
But what we are seeing now is that we are drawing a line with a price-to-earnings ratio that is equivalent to the company's growth rate. Good? Therefore, the price-to-earnings ratio for fair value is 29.88.
We are not using 15 here because this is a very fast-growing company .
Looking at this chart and adding the normalized price-to-earnings ratio line, we find that the market has given this stock a high valuation for many years and many years . But as I shorten this timeframe, watch what happens .
It is changing. Good? Fair value has been high here in the past. Let me shorten the timeframe even further. And now suddenly, we see a change in fair value, but we also see the fact that prices have fallen back to a price-to-earnings ratio equal to the growth rate, which is 17 times earnings, and the stock is now trading at this level.