SAP SE (SAP.DE) Stock Fundamental Analysis
FRA:SAP - Deutsche Boerse Ag - DE0007164600 - Common Stock - Currency: EUR
We assign a fundamental rating of 5 out of 10 to SAP. SAP was compared to 98 industry peers in the Software industry. Both the profitability and the financial health of SAP get a neutral evaluation. Nothing too spectacular is happening here. SAP has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year SAP was profitable.
In the past year SAP had a positive cash flow from operations.
Each year in the past 5 years SAP has been profitable.
SAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 4.21%, SAP perfoms like the industry average, outperforming 55.17% of the companies in the same industry.
SAP has a Return On Equity (6.88%) which is in line with its industry peers.
SAP's Return On Invested Capital of 9.79% is fine compared to the rest of the industry. SAP outperforms 68.97% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SAP is below the industry average of 11.66%.
The last Return On Invested Capital (9.79%) for SAP is above the 3 year average (8.61%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.21% | ||
| ROE | 6.88% | ||
| ROIC | 9.79% |
ROA(3y)5.45%
ROA(5y)6.51%
ROE(3y)8.93%
ROE(5y)11.53%
ROIC(3y)8.61%
ROIC(5y)8.53%
1.3 Margins
SAP has a Profit Margin (9.14%) which is in line with its industry peers.
SAP's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 23.62%, SAP belongs to the top of the industry, outperforming 83.91% of the companies in the same industry.
SAP's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 72.94%, SAP is in line with its industry, outperforming 48.28% of the companies in the same industry.
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 | 23.62% | ||
| PM (TTM) | 9.14% | ||
| GM | 72.94% |
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
SAP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for SAP remains at a similar level compared to 1 year ago.
SAP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, SAP has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 8.28 indicates that SAP is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 8.28, SAP is doing good in the industry, outperforming 77.01% of the companies in the same industry.
The Debt to FCF ratio of SAP is 2.59, which is a good value as it means it would take SAP, 2.59 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 2.59, SAP perfoms like the industry average, outperforming 56.32% of the companies in the same industry.
A Debt/Equity ratio of 0.16 indicates that SAP is not too dependend on debt financing.
The Debt to Equity ratio of SAP (0.16) is better than 62.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 2.59 | ||
| Altman-Z | 8.28 |
ROIC/WACC1.46
WACC6.72%
2.3 Liquidity
A Current Ratio of 1.12 indicates that SAP should not have too much problems paying its short term obligations.
SAP has a Current ratio of 1.12. This is in the lower half of the industry: SAP underperforms 62.07% of its industry peers.
A Quick Ratio of 1.12 indicates that SAP should not have too much problems paying its short term obligations.
The Quick ratio of SAP (1.12) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The earnings per share for SAP have decreased strongly by -37.17% in the last year.
Measured over the past years, SAP shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.22% on average per year.
Looking at the last year, SAP shows a quite strong growth in Revenue. The Revenue has grown by 9.51% in the last year.
The Revenue has been growing slightly by 4.40% on average over the past years.
EPS 1Y (TTM)-37.17%
EPS 3Y-12.21%
EPS 5Y-2.22%
EPS Q2Q%1.26%
Revenue 1Y (TTM)9.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%13.31%
3.2 Future
SAP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.67% yearly.
SAP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.55% yearly.
EPS Next Y35.86%
EPS Next 2Y27.96%
EPS Next 3Y23.64%
EPS Next 5Y19.67%
Revenue Next Year11.59%
Revenue Next 2Y11.79%
Revenue Next 3Y12.4%
Revenue Next 5Y11.55%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
SAP is valuated quite expensively with a Price/Earnings ratio of 59.26.
The rest of the industry has a similar Price/Earnings ratio as SAP.
SAP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.47.
A Price/Forward Earnings ratio of 43.64 indicates a quite expensive valuation of SAP.
SAP's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 92.74. SAP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.26 | ||
| Fwd PE | 43.64 |
4.2 Price Multiples
SAP's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SAP is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 71.42 | ||
| EV/EBITDA | 33.19 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 23.64% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.65
PEG (5Y)N/A
EPS Next 2Y27.96%
EPS Next 3Y23.64%
5. Dividend
5.1 Amount
With a yearly dividend of 0.82%, SAP is not a good candidate for dividend investing.
SAP's Dividend Yield is rather good when compared to the industry average which is at 1.29. SAP pays more dividend than 83.91% of the companies in the same industry.
With a Dividend Yield of 0.82, SAP pays less dividend than the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
The dividend of SAP is nicely growing with an annual growth rate of 7.95%!
Dividend Growth(5Y)7.95%
Div Incr Years4
Div Non Decr Years5
5.3 Sustainability
SAP pays out 82.11% of its income as dividend. This is not a sustainable payout ratio.
The dividend of SAP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP82.11%
EPS Next 2Y27.96%
EPS Next 3Y23.64%
SAP SE
FRA:SAP (2/5/2025, 5:35:30 PM)
270.8
+3.5 (+1.31%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners39.9%
Inst Owner ChangeN/A
Ins Owners5.09%
Ins Owner ChangeN/A
Market Cap315.89B
Analysts75.26
Price Target257.74 (-4.82%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
Yearly Dividend2.2
Dividend Growth(5Y)7.95%
DP82.11%
Div Incr Years4
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.48%
Min EPS beat(2)1.1%
Max EPS beat(2)1.86%
EPS beat(4)2
Avg EPS beat(4)-6.37%
Min EPS beat(4)-28.22%
Max EPS beat(4)1.86%
EPS beat(8)5
Avg EPS beat(8)18.6%
EPS beat(12)5
Avg EPS beat(12)7.11%
EPS beat(16)9
Avg EPS beat(16)14.75%
Revenue beat(2)1
Avg Revenue beat(2)1.75%
Min Revenue beat(2)-0.61%
Max Revenue beat(2)4.1%
Revenue beat(4)1
Avg Revenue beat(4)0.6%
Min Revenue beat(4)-0.68%
Max Revenue beat(4)4.1%
Revenue beat(8)3
Avg Revenue beat(8)0%
Revenue beat(12)3
Avg Revenue beat(12)-1.15%
Revenue beat(16)5
Avg Revenue beat(16)-0.81%
PT rev (1m)6.31%
PT rev (3m)16.85%
EPS NQ rev (1m)3.13%
EPS NQ rev (3m)-0.09%
EPS NY rev (1m)0.13%
EPS NY rev (3m)1.5%
Revenue NQ rev (1m)0.42%
Revenue NQ rev (3m)0.79%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.26 | ||
| Fwd PE | 43.64 | ||
| P/S | 9.24 | ||
| P/FCF | 71.42 | ||
| P/OCF | 60.52 | ||
| P/B | 6.95 | ||
| P/tB | 27.26 | ||
| EV/EBITDA | 33.19 |
EPS(TTM)4.57
EY1.69%
EPS(NY)6.21
Fwd EY2.29%
FCF(TTM)3.79
FCFY1.4%
OCF(TTM)4.47
OCFY1.65%
SpS29.3
BVpS38.95
TBVpS9.93
PEG (NY)1.65
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.21% | ||
| ROE | 6.88% | ||
| ROCE | 14.66% | ||
| ROIC | 9.79% | ||
| ROICexc | 12.3% | ||
| ROICexgc | 54.14% | ||
| OM | 23.62% | ||
| PM (TTM) | 9.14% | ||
| GM | 72.94% | ||
| FCFM | 12.94% |
ROA(3y)5.45%
ROA(5y)6.51%
ROE(3y)8.93%
ROE(5y)11.53%
ROIC(3y)8.61%
ROIC(5y)8.53%
ROICexc(3y)10.74%
ROICexc(5y)10.49%
ROICexgc(3y)48.05%
ROICexgc(5y)47.94%
ROCE(3y)12.97%
ROCE(5y)12.91%
ROICexcg growth 3Y12.75%
ROICexcg growth 5Y0.43%
ROICexc growth 3Y15.56%
ROICexc growth 5Y4.33%
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%
F-Score7
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 2.59 | ||
| Debt/EBITDA | 0.77 | ||
| Cap/Depr | 62.27% | ||
| Cap/Sales | 2.33% | ||
| Interest Coverage | 14.67 | ||
| Cash Conversion | 55.82% | ||
| Profit Quality | 141.58% | ||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 8.28 |
F-Score7
WACC6.72%
ROIC/WACC1.46
Cap/Depr(3y)55.18%
Cap/Depr(5y)51.03%
Cap/Sales(3y)2.6%
Cap/Sales(5y)2.73%
Profit Quality(3y)146.95%
Profit Quality(5y)133.59%
High Growth Momentum
Growth
EPS 1Y (TTM)-37.17%
EPS 3Y-12.21%
EPS 5Y-2.22%
EPS Q2Q%1.26%
EPS Next Y35.86%
EPS Next 2Y27.96%
EPS Next 3Y23.64%
EPS Next 5Y19.67%
Revenue 1Y (TTM)9.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%13.31%
Revenue Next Year11.59%
Revenue Next 2Y11.79%
Revenue Next 3Y12.4%
Revenue Next 5Y11.55%
EBIT growth 1Y23.94%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year51.57%
EBIT Next 3Y25.57%
EBIT Next 5Y21.14%
FCF growth 1Y-20.28%
FCF growth 3Y-6.56%
FCF growth 5Y10.55%
OCF growth 1Y-17.57%
OCF growth 3Y-5.69%
OCF growth 5Y8.35%