SAP SE (SAP.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:SAP - DE0007164600 - Common Stock
195.54 EUR
-5.41 (-2.69%)
SAP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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
- SAP had positive earnings in the past year.
- In the past year SAP had a positive cash flow from operations.
- 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
- The Return On Assets of SAP (10.35%) is better than 73.68% of its industry peers.
- Looking at the Return On Equity, with a value of 16.54%, SAP is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
- SAP's Return On Invested Capital of 13.05% is fine compared to the rest of the industry. SAP outperforms 78.95% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for SAP is below the industry average of 13.49%.
- The 3 year average ROIC (8.58%) for SAP is below the current ROIC(13.05%), indicating increased profibility in the last year.
| 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
- With a decent Profit Margin value of 19.41%, SAP is doing good in the industry, outperforming 74.56% of the companies in the same industry.
- SAP's Profit Margin has declined in the last couple of years.
- With an excellent Operating Margin value of 27.47%, SAP belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
- In the last couple of years the Operating Margin of SAP has remained more or less at the same level.
- SAP's Gross Margin of 73.83% is in line compared to the rest of the industry. SAP outperforms 50.88% of its industry peers.
- In the last couple of years the Gross Margin of SAP has remained more or less at the same level.
| 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.
- Compared to 1 year ago, SAP has about the same amount of shares outstanding.
- The number of shares outstanding for SAP has been reduced compared to 5 years ago.
- The debt/assets ratio for SAP is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 7.48 indicates that SAP is not in any danger for bankruptcy at the moment.
- SAP has a better Altman-Z score (7.48) than 80.70% of its industry peers.
- SAP has a debt to FCF ratio of 1.41. This is a very positive value and a sign of high solvency as it would only need 1.41 years to pay back of 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 68.42% of the companies in the same industry.
- SAP has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
- SAP has a Debt to Equity ratio of 0.14. This is in the better half of the industry: SAP outperforms 63.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 1.41 | ||
| Altman-Z | 7.48 |
ROIC/WACC1.68
WACC7.79%
2.3 Liquidity
- A Current Ratio of 1.10 indicates that SAP should not have too much problems paying its short term obligations.
- SAP has a Current ratio of 1.10. This is in the lower half of the industry: SAP underperforms 64.04% of its industry peers.
- A Quick Ratio of 1.10 indicates that SAP should not have too much problems paying its short term obligations.
- The Quick ratio of SAP (1.10) is worse than 62.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 30.11% over the past year.
- Measured over the past years, SAP shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.38% on average per year.
- SAP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.70%.
- The Revenue has been growing slightly by 4.40% on average over the past years.
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.
- Based on estimates for the next years, SAP will show a quite strong growth in Revenue. The Revenue will grow by 12.20% on average per year.
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
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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 33.03, the valuation of SAP can be described as expensive.
- Based on the Price/Earnings ratio, SAP is valued a bit cheaper than 60.53% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.25. SAP is valued slightly more expensive when compared to this.
- Based on the Price/Forward Earnings ratio of 26.97, the valuation of SAP can be described as expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of SAP is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of SAP to the average of the S&P500 Index (25.98), we can say SAP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.03 | ||
| Fwd PE | 26.97 |
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 61.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.15 | ||
| EV/EBITDA | 20.43 |
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.
- SAP's earnings are expected to grow with 24.01% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.92
PEG (5Y)N/A
EPS Next 2Y26.51%
EPS Next 3Y24.01%
5. Dividend
5.1 Amount
- SAP has a Yearly Dividend Yield of 1.24%.
- Compared to an average industry Dividend Yield of 0.68, SAP pays a better dividend. On top of this SAP pays more dividend than 83.33% of the companies listed in the same industry.
- Compared to the average S&P500 Dividend Yield of 1.82, SAP is paying slightly less dividend.
| 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
- SAP pays out 38.73% of its income as dividend. This is a sustainable payout ratio.
- SAP's earnings are growing more than its dividend. This makes the dividend growth 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 4 / 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%.