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SAP SE SAP

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Stock XETR Rating as of
€170.20 −5.36 (3.05%)
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Company Report

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SAP Earnings: 2024 Guidance Reaffirmed As Cloud Strength Continues

Dan Romanoff,

We maintain our fair value estimate for narrow-moat SAP at EUR 132 per share after the firm reported a robust first quarter that topped our revenue and margin expectations. Management reaffirmed 2024 guidance and reiterated its 2025 ambition, which we believe are supported by continued strategic pivots toward the cloud and business artificial intelligence, or AI, segments. Overall, we see results as solid and a continuation of recent trends. Although we continue to expect some churn due to forced cloud migration, we maintain our belief in SAP’s strong suite of offerings and the inherent switching costs associated with core software systems. Shares already incorporate the full benefits of the cloud transition and are overvalued, in our opinion.

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Price vs Fair Value

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SAP is trading within a range we consider fairly valued.
Price
€174.86
Fair Value
€651.00
Uncertainty
Medium
1-Star Price
€417.10
5-Star Price
€38.20
Economic Moat
Wfmbzd
Capital Allocation
Mkbs

Bulls Say, Bears Say

Bulls

SAP should be able to migrate the majority of its on-premises ERP customers to S/4HANA while continuing to add hefty net new customers to the platform.

Bears

SAP’s S/4HANA mandated transition could cause even greater customer churn as customers are forced to reassess their ERP and database providers.

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News

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Trading Information

Previous Close Price
€175.56
Day Range
€168.48–174.88
52-Week Range
€118.52–184.48
Bid/Ask
€0.00 / €0.00
Market Cap
€198.66 Bil
Volume/Avg
2.3 Mil / 1.7 Mil

Key Statistics

Price/Earnings (Normalized)
34.94
Price/Sales
6.61
Dividend Yield (Trailing)
1.17%
Dividend Yield (Forward)
1.25%
Total Yield
1.84%

Company Profile

Founded in 1972 by former IBM employees, SAP provides database technology and enterprise resource planning software to enterprises around the world. Across more than 180 countries, the company serves 440,000 customers, approximately 80% of which are small- to medium-size enterprises.
Sector
Technology
Industry
Software - Application
Stock Style Box
Large Growth
Total Number of Employees
107,602
Website
https://www.sap.com

Competitors

Valuation

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Metric
SAP
WDAY
IBM
Price/Earnings (Normalized)
 34.9443.9618.93
Price/Book Value
 4.738.387.39
Price/Sales
 6.619.382.71
Price/Cash Flow
 33.0831.2014.28
Price/Earnings
SAP
WDAY
IBM

Financial Strength

Metric
SAP
WDAY
IBM
Quick Ratio
 1.121.870.80
Current Ratio
 1.251.970.96
Interest Coverage
 4.751.485.99
Quick Ratio
SAP
WDAY
IBM

Profitability

Metric
SAP
WDAY
IBM
Return on Assets (Normalized)
 11.27%10.93%6.74%
Return on Equity (Normalized)
 18.79%23.82%39.82%
Return on Invested Capital (Normalized)
 15.28%14.34%11.92%
Return on Assets
SAP
WDAY
IBM
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Software - Application Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
CRM
Salesforce IncPnzxpyfxgLhzt$267.9 Bil
SAP
SAP SE ADRQqgCydqx$219.3 Bil
INTU
Intuit IncDwynvqmsvdLjyt$177.9 Bil
NOW
ServiceNow IncKfjqmhqyrZzx$152.2 Bil
UBER
Uber Technologies IncYztdytqvBxrhfm$144.4 Bil
SHOP
Shopify Inc Registered Shs -A- Subord VtgFzfjhgwkmTxsmkp$89.5 Bil
CDNS
Cadence Design Systems IncSzdrsgdlYhgxtz$75.6 Bil
WDAY
Workday Inc Class AYmrmszjsfcPsdv$67.6 Bil
ROP
Roper Technologies IncZssptmbknnBxyqw$57.6 Bil
DASTY
Dassault Systemes SE ADRKpsvkqtkYwwl$54.7 Bil

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