SAP SE (SAP.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:SAP - DE0007164600 - Common Stock
166.16 EUR
-29.98 (-15.29%)
Taking everything into account, SAP scores 6 out of 10 in our fundamental rating. SAP was compared to 114 industry peers in the Software industry. SAP has an average financial health and profitability rating. SAP has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year SAP was profitable.
- SAP had a positive operating cash flow in the past year.
- Each year in the past 5 years SAP has been profitable.
- In the past 5 years SAP always reported a positive cash flow from operatings.
1.2 Ratios
- SAP has a better Return On Assets (10.35%) than 74.56% of its industry peers.
- The Return On Equity of SAP (16.54%) is better than 67.54% of its industry peers.
- SAP's Return On Invested Capital of 13.05% is fine compared to the rest of the industry. SAP outperforms 79.82% of its industry peers.
- SAP had an Average Return On Invested Capital over the past 3 years of 8.58%. This is below the industry average of 13.49%.
- The last Return On Invested Capital (13.05%) for SAP is above the 3 year average (8.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.35% | ||
| ROE | 16.54% | ||
| ROIC | 13.05% |
ROA(3y)5.45%
ROA(5y)6.51%
ROE(3y)8.93%
ROE(5y)11.53%
ROIC(3y)8.58%
ROIC(5y)8.51%
1.3 Margins
- SAP has a better Profit Margin (19.41%) than 75.44% of its industry peers.
- In the last couple of years the Profit Margin of SAP has declined.
- SAP's Operating Margin of 27.47% is amongst the best of the industry. SAP outperforms 85.09% of its industry peers.
- SAP's Operating Margin has been stable in the last couple of years.
- The Gross Margin of SAP (73.83%) is comparable to the rest of the industry.
- SAP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.47% | ||
| PM (TTM) | 19.41% | ||
| GM | 73.83% |
OM growth 3Y7.42%
OM growth 5Y1.05%
PM growth 3Y-21.47%
PM growth 5Y-5.38%
GM growth 3Y0.43%
GM growth 5Y0.66%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SAP is still creating some value.
- SAP has about the same amout of shares outstanding than it did 1 year ago.
- SAP has less shares outstanding than it did 5 years ago.
- SAP has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 7.35 indicates that SAP is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 7.35, SAP belongs to the top of the industry, outperforming 80.70% of the companies in the same industry.
- The Debt to FCF ratio of SAP is 1.41, which is an excellent value as it means it would take SAP, only 1.41 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 1.41, SAP is in the better half of the industry, outperforming 69.30% of the companies in the same industry.
- A Debt/Equity ratio of 0.14 indicates that SAP is not too dependend on debt financing.
- SAP's Debt to Equity ratio of 0.14 is fine compared to the rest of the industry. SAP outperforms 64.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 1.41 | ||
| Altman-Z | 7.35 |
ROIC/WACC1.68
WACC7.78%
2.3 Liquidity
- SAP has a Current Ratio of 1.10. This is a normal value and indicates that SAP is financially healthy and should not expect problems in meeting its short term obligations.
- SAP has a Current ratio of 1.10. This is in the lower half of the industry: SAP underperforms 63.16% of its industry peers.
- SAP has a Quick Ratio of 1.10. This is a normal value and indicates that SAP is financially healthy and should not expect problems in meeting its short term obligations.
- SAP's Quick ratio of 1.10 is on the low side compared to the rest of the industry. SAP is outperformed by 61.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
- SAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 30.11%, which is quite impressive.
- The Earnings Per Share has been decreasing by -2.38% on average over the past years.
- The Revenue has grown by 9.70% in the past year. This is quite good.
- SAP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.40% yearly.
EPS 1Y (TTM)30.11%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%29.27%
Revenue 1Y (TTM)9.7%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%7.15%
3.2 Future
- Based on estimates for the next years, SAP will show a very strong growth in Earnings Per Share. The EPS will grow by 21.23% on average per year.
- SAP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.20% yearly.
EPS Next Y35.83%
EPS Next 2Y26.51%
EPS Next 3Y24.01%
EPS Next 5Y21.23%
Revenue Next Year9.26%
Revenue Next 2Y9.87%
Revenue Next 3Y10.73%
Revenue Next 5Y12.2%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 28.07, the valuation of SAP can be described as expensive.
- 63.16% of the companies in the same industry are more expensive than SAP, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 28.60. SAP is around the same levels.
- A Price/Forward Earnings ratio of 22.92 indicates a rather expensive valuation of SAP.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of SAP indicates a somewhat cheap valuation: SAP is cheaper than 60.53% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, SAP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.07 | ||
| Fwd PE | 22.92 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SAP is on the same level as its industry peers.
- SAP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SAP is cheaper than 62.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.87 | ||
| EV/EBITDA | 19.93 |
4.3 Compensation for Growth
- SAP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- SAP has a very decent profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as SAP's earnings are expected to grow with 24.01% in the coming years.
PEG (NY)0.78
PEG (5Y)N/A
EPS Next 2Y26.51%
EPS Next 3Y24.01%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.24%, SAP has a reasonable but not impressive dividend return.
- SAP's Dividend Yield is rather good when compared to the industry average which is at 0.68. SAP pays more dividend than 83.33% of the companies in the same industry.
- SAP's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
5.2 History
- On average, the dividend of SAP grows each year by 7.95%, which is quite nice.
Dividend Growth(5Y)7.95%
Div Incr Years1
Div Non Decr Years6
5.3 Sustainability
- 38.73% of the earnings are spent on dividend by SAP. This is a low number and sustainable payout ratio.
- The dividend of SAP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP38.73%
EPS Next 2Y26.51%
EPS Next 3Y24.01%
SAP SE / SAP.DE FAQ
What is the fundamental rating for SAP stock?
ChartMill assigns a fundamental rating of 6 / 10 to SAP.DE.
What is the valuation status for SAP stock?
ChartMill assigns a valuation rating of 5 / 10 to SAP SE (SAP.DE). This can be considered as Fairly Valued.
Can you provide the profitability details for SAP SE?
SAP SE (SAP.DE) has a profitability rating of 6 / 10.
What is the expected EPS growth for SAP SE (SAP.DE) stock?
The Earnings per Share (EPS) of SAP SE (SAP.DE) is expected to grow by 35.83% in the next year.
How sustainable is the dividend of SAP SE (SAP.DE) stock?
The dividend rating of SAP SE (SAP.DE) is 6 / 10 and the dividend payout ratio is 38.73%.