SAP SE (SAP.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:SAP - DE0007164600 - Common Stock
197.92 EUR
+8.08 (+4.26%)
SAP gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 119 industry peers in the Software industry. SAP has only an average score on both its financial health and profitability. 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.
- SAP had positive earnings in each of the past 5 years.
- Each year in the past 5 years SAP had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 10.35%, SAP is doing good in the industry, outperforming 74.79% of the companies in the same industry.
- With a decent Return On Equity value of 16.54%, SAP is doing good in the industry, outperforming 67.23% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 13.05%, SAP is in the better half of the industry, outperforming 79.83% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for SAP is below the industry average of 13.47%.
- 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 Profit Margin of 19.41%. This is in the better half of the industry: SAP outperforms 74.79% of its industry peers.
- In the last couple of years the Profit Margin of SAP has declined.
- Looking at the Operating Margin, with a value of 27.47%, SAP belongs to the top of the industry, outperforming 86.55% of the companies in the same industry.
- 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.
- 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SAP is creating some value.
- Compared to 1 year ago, SAP has about the same amount of shares outstanding.
- 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 7.17 indicates that SAP is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 7.17, SAP is in the better half of the industry, outperforming 79.83% 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.
- SAP has a better Debt to FCF ratio (1.41) than 67.23% of its industry peers.
- SAP has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
- Looking at the Debt to Equity ratio, with a value of 0.14, SAP is in the better half of the industry, outperforming 63.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 1.41 | ||
| Altman-Z | 7.17 |
ROIC/WACC1.61
WACC8.12%
2.3 Liquidity
- A Current Ratio of 1.10 indicates that SAP should not have too much problems paying its short term obligations.
- Looking at the Current ratio, with a value of 1.10, SAP is doing worse than 63.87% of the companies in the same industry.
- 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 has a Quick ratio of 1.10. This is in the lower half of the industry: SAP underperforms 61.34% 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.
- SAP shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.38% yearly.
- 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
- The Earnings Per Share is expected to grow by 21.23% on average over the next years. This is a very strong growth
- 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 Y35.86%
EPS Next 2Y26.6%
EPS Next 3Y24.06%
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
- The Price/Earnings ratio is 33.43, which means the current valuation is very expensive for SAP.
- Based on the Price/Earnings ratio, SAP is valued a bit cheaper than 60.50% of the companies in the same industry.
- When comparing the Price/Earnings ratio of SAP to the average of the S&P500 Index (27.30), we can say SAP is valued slightly more expensively.
- With a Price/Forward Earnings ratio of 27.26, SAP can be considered very expensive at the moment.
- The rest of the industry has a similar Price/Forward Earnings ratio as SAP.
- SAP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.43 | ||
| Fwd PE | 27.26 |
4.2 Price Multiples
- SAP's Enterprise Value to EBITDA is on the same level as the industry average.
- Based on the Price/Free Cash Flow ratio, SAP is valued a bit cheaper than the industry average as 63.03% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.58 | ||
| EV/EBITDA | 19.29 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of SAP may justify a higher PE ratio.
- SAP's earnings are expected to grow with 24.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.93
PEG (5Y)N/A
EPS Next 2Y26.6%
EPS Next 3Y24.06%
5. Dividend
5.1 Amount
- SAP has a Yearly Dividend Yield of 1.14%. Purely for dividend investing, there may be better candidates out there.
- SAP's Dividend Yield is rather good when compared to the industry average which is at 0.63. SAP pays more dividend than 84.03% 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 | 1.14% |
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 2Y26.6%
EPS Next 3Y24.06%
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 35.86% 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%.